More than 90 large, profitable corporations on the Fortune 500 list effectively did not pay a penny in federal income taxes in 2018, according to a new report published Monday by the Institute on Taxation and Economic Policy.
“The key takeaway from this study is that the 2017 tax law is working out well for profitable corporations.”
—Matthew Gardner, Institute on Taxation and Economic PolicyITEP examined financial filings from 379 Fortune 500 companies that reported a profit in 2018, the first year President Donald Trump’s tax cuts took effect. The Republican tax law slashed the corporate tax rate from 35 percent to 21 percent.
“The 379 profitable corporations identified in this study paid an effective federal income tax rate of 11.3 percent on their 2018 income, slightly more than half the statutory 21 percent tax,” ITEP said. “The 11.3 percent effective tax rate found in this study is likely the lowest effective tax rate in the last 40 years.”
ITEP found that 91 of the 379 companies analyzed took advantage of loopholes to effectively not pay federal income taxes in 2018 despite making a combined profit of $101 billion. That list of companies includes prominent corporate giants such as Amazon, Halliburton, Chevron, Starbucks, and Delta Air Lines.
In a video posted on Twitter, ITEP listed all 91 corporations that payed zero dollars in federal income taxes last year:
91 profitable Fortune 500 companies paid $0.00 in federal income taxes on U.S. income in 2018, the first year of the Trump-GOP tax law.— ITEP (@iteptweets) December 16, 2019
📢📢📢 Our nation's ability to fund critical priorities is a tax policy issue. https://t.co/R8tobuczJR pic.twitter.com/qtUQOqPROM
Matthew Gardner, a senior fellow at ITEP and lead author of the report, said the 2017 Trump tax law was “destined to fail to live up to its grand promises.”
“Proponents of the law claimed it would boost federal corporate tax revenue, but that is nearly impossible since the law not only reduced the corporate tax rate, it also left some of the most egregious loopholes intact,” Gardner said in a statement. “The 2017 tax law was a clear giveaway to corporations and their shareholders.”
Thanks to the Republican tax law, which Trump signed in 2017, Bank of America, J.P. Morgan Chase, Wells Fargo, Amazon, and Verizon raked in a combined $16 billion in tax breaks in 2018.
“The key takeaway from this study is that the 2017 tax law is working out well for profitable corporations, which are paying some of the lowest tax rates that ITEP has recorded in the nearly 40 years it has been examining corporate taxes,” said Gardner.
“By enacting a law that dramatically reduced corporate tax collections, lawmakers weakened the nation’s ability to adequately fund critical priorities,” Gardner added. “Lawmakers will have to stop kowtowing to special interests and pretending that raising revenue doesn’t matter.”
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