Dozens of America’s largest corporations failed to pay federal income taxes over the past year thanks to a number of tax breaks – including some brand new ones, a new report said.
In its last fiscal year, the 55 companies avoided taxes totaling $ 8.5 billion on pre-tax profits of more than $ 40 billion, according to the Institute for Taxes and Economic Policy Friday report.
In fact, 52 of these companies – including big names like Nike, FedEx and Dish Network – have pocketed tax breaks totaling $ 3.5 billion, according to the analysis of the left-wing think tank.
And 26 of them haven’t paid a penny in federal income tax in the three years since the law reforming the Tax Cut and Employment Act was signed in 2017, the report said. This group includes shipping giant FedEx and utility company Duke Energy, which reported earnings before taxes of nearly $ 15 billion over those three years.
“Duke Energy is fully compliant with federal and state tax laws as part of our efforts to make investments that benefit our customers and communities,” said company spokeswoman Catherine Butler, adding that Duke will earn more than $ 2 billion in 2020 – Paid annual state and local taxes.
According to the think tank researchers, large companies have been using loopholes in federal tax law to improve their bottom line for decades. But they received a new blessing from the CARES Act, the $ 2.2 trillion business cycle project designed to help companies weather the COVID-19 pandemic.
Large companies were able to leverage a provision in the invoice to use the losses they accumulated in 2018 or 2019 to offset gains from previous years, which the report said reduced some of their 2020 tax bills to less than zero. That move accounted for at least $ 500 million of the 55 giants’ tax breaks, the report said.
Sticking to the CARES Act’s tax breaks, FedEx said the act has helped it and other companies “navigate a rapidly changing economy and market while continuing to invest in capital, hire team members, and retirement plans for employees to finance “.
However, many companies also used more established methods of obtaining tax rebates.
That includes write-offs for paying executives in inventory used by more than a dozen companies while at least a half-dozen took out federal loans for research and experimentation, the report said.
The list included a few companies hit by the pandemic, including craft trader Michaels, as well as companies that have succeeded despite the bans like Salesforce.com, the cloud computing company that announced record 2020 results in February.
By restricting such tax breaks or reintroducing a form of “minimum tax” that requires profitable companies to pay at least a portion of the tax in every profitable year, Congress and President Biden could take an important step towards a more just and more sustainable tax system “Wrote authors Matthew Gardner and Steve Wamhoff in the report.
Salesforce, Michaels, Nike, and Dish Network did not immediately respond to requests for comment.