WASHINGTON—In further evidence of how lobbyists, dark money, and campaign contributions have given the corporate class outsize clout in the Nation’s Capital, a recent report by a non-profit think tank reveals 55 of the largest firms in the U.S. paid, combined, less than zero in federal income taxes in 2020.
As a matter of fact, past tax breaks—including Trump expansion of one to carry forward losses, many of which are only on paper—let the firms collect a combined $3.5 billion in tax refunds that year. And 26 of the 55 were able to escape taxes every year since Congress passed the 2017 Trump-GOP tax cut for corporations and the rich, starting with their 2018 tax year.
“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,” Matthew Gardner and Steve Wamhoff wrote for the Institute on Taxation and Economic Policy.
“Tax-avoiding companies represent various industries and collectively enjoyed almost $40.5 billion in U.S. pretax income in 2020,” the two said, citing the firms’ required financial reports—the same source the AFL-CIO uses for its annual Executive Paywatch. “The statutory federal tax rate for corporate profits is 21%,” the two explain. “Applying their rate to that income would have sent $8.5 billion” to the Treasury. Combined, they got the rebates, instead.
The 26 firms who escaped taxes all three years include notoriously anti-union FedEx, as well as Nike, Duke Energy, the Dish Network, and Archer Daniels Midland, the Illinois-based agribusiness giant. ADM got a $2 million refund on $2.13 billion in revenues. FedEx got $877 million back, equal to 12.8% of its $6.877 billion in revenues over those same three years. Nike got $741 million back, equivalent to 18% of its $4.1 billion in revenues from 2018-20.
Nike also made the AFL-CIO’s Executive Paywatch list of high pay for corporate CEOs in 2020. Head honcho John Donahoe II garnered $53.5 million, most of it ($46 million) in stock and option awards. Donahoe’s compensation was 1,935 times Nike’s median pay to workers.
The study backs up years of criticism from unions, progressive lawmakers, and for at least the last year and a half, the Poor People’s Campaign, about how the tax code is skewed in favor of the rich and politically powerful.
After all, Poor People’s Campaign leader the Rev. William Barber II often points out, corporations got 84% of the benefits of the first bill, the Cares Act, designed to help rescue the economy from the ravages of the coronavirus pandemic. Lawmakers enacted that measure when the GOP Trump regime, a handmaiden of the corporate class, ruled the White House.
Just widened the advantage
But the largesse and the resulting non-payment of taxes wasn’t all Trump’s fault, the two analysts note. His tax cut just widened the corporate behemoths’ advantage.
“For decades, the biggest and most profitable U.S. corporations have found ways to shelter their profits from federal income taxation,” the authors reported. That corporate tax avoidance dates back to GOP President Ronald Reagan’s 1981 tax cut—which had bipartisan support.
“Now, with most corporations reporting their third year of results under the new corporate tax laws pushed through by Trump in 2017, it is crystal clear the TCJA failed to address loopholes that enable tax dodging, and may have made it worse.”
Treehouse Foods, a private label food manufacturer headquartered in Oak Brook, Ill., set some sort of record in the ITEP study. Treehouse’s most notable product is Del Monte soups (not fruit cups). It garnered $8 million in revenue in 2020 and received $96 million in rebates, an effective corporate tax rate of -1,167%, the ITEP study reports.
The largest rebate in 2020 went to Danaher, a D.C.-based manufacturer of medical and life sciences products. It got $321 million, equal to 20% of its gross income of $1.58 billion.
A Wikipedia article notes that in 2020, Danaher received a contract from Trump’s Food and Drug Administration to be one manufacturer of rapid tests for the coronavirus. Neither news stories nor federal databases disclosed the value of the March 2020 contract.
The largest company to get a rebate last year was Charter Communications, which garnered $3.68 billion in revenue last year. It got $7 million back from the tax agency. Charter was one of a dozen firms, among the 55, that used a tax break for executive stock options to cut its income tax liability, the study says.
Though the report did not say so—since it only covers corporate revenue and rebates—Charter was also one of ten big telecom firms whose CEOs received letters in March 2020 from the Communications Workers and its allies. With the coronavirus pandemic in full swing, CWA and the others asked the companies to give consumers a financial break as the plague hit and people lost jobs. AT&T, Verizon, Sprint, and T-Mobile were among the other recipients.
“In this collective time of crisis, we are asking broadband CEOs to show leadership by lifting data caps, waiving fees, and doing everything within their power to help people connect to the world from home and stop the spread of Covid-19. People’s lives are depending on it,” said CWA President Chris Shelton.
“The telecommunications industry must do more to protect consumers and facilitate connectivity during the novel coronavirus pandemic,” CWA and the other organizations wrote. “Connectivity is essential during times of crisis, and during an infectious disease crisis in particular. In response to the pandemic, public health officials have recommended ‘social distancing.’ This guidance will require a significant shift to telework, telemedicine, and tele-education. This shift necessitates far more bandwidth than under normal circumstances.”
CONTRIBUTOR
Comments