At least 55 major profitable companies didn’t pay any federal corporate income taxes last year, according a report by the left-leaning Institute on Taxation and Economic Policy (ITEP).
The group faulted the GOP tax cuts passed in 2017 as well as tax breaks enacted in the first major coronavirus relief bill passed early last year as contributing factors.
“This continues a decades-long trend of corporate tax avoidance by the biggest U.S. corporations, and it appears to be the product of long-standing tax breaks preserved or expanded by the 2017 Tax Cuts and Jobs Act (TCJA) as well as the CARES Act tax breaks enacted in the spring of 2020,” the group wrote in its report on the findings.
The report follows President BidenJoe BidenTrump endorses challenger in Michigan AG race On The Money: Democrats get to the hard part Health Care — GOP attorneys general warn of legal battle over Biden's vaccine mandate MORE's proposal to pay for a more than $2 trillion infrastructure plan by raising the corporate tax rate from 21 percent to 28 percent. Prior to the 2017 GOP tax cut, the rate was 35 percent.
In remarks laying out his plan Wednesday, Biden pointed to a previous year’s report showing that 91 companies paid no federal income taxes.
“That’s just wrong,” he said. “A fireman and a teacher paying 22 percent? Amazon and 90 other major corporations are paying zero in federal taxes? I’m going to put an end to that.”
The ITEP report found that the companies, which took in a collective $40.5 billion in pretax income, actually enjoyed $3.5 billion in tax rebates.
FedEx, for example, received a $230 million rebate while taking in $1.2 billion in pretax income, Nike took home a $109 million rebate on $2.9 billion in pretax income, and Salesforce paid no federal income tax on $2.6 billion of pretax income.
Additional large companies may have similarly been able to avoid a federal tax bill, but the company’s study only covered the 500 largest publicly traded companies.
The unpaid taxes were not the result of illegal maneuvers, but rather the result of legal incentives for companies to spend and invest money in certain ways, as well as companies taking advantage of additional tax breaks written into law.