As the Biden administration moves swiftly towards restoring the American economy, a new shocking revelation has taken the country and federal tax department by storm. A recent investigation unfolded that Fortune 500s’ more than 50 renowned companies paid zero taxes despite making billions as profit last year. The total tax evaded amounts to a whopping 8.5 $billion. Dozens of United States major household brands have achieved $77 billion in cumulative national profit in the last three years. According to a new study, these companies haven’t paid a single solitary penny on federal taxes after Donald Trump, in his initial year of presidency, inflicted a huge tax cut for organizations.
As reported by New York Times, the cooperative tax rate was knocked down to 21 percent from 35 percent after in 2017 the Republican Congress passed the sweeping tax bill. According to the analysis, due to a spectrum of within-law abatements and exemptions, these organizations were able to cut down their tax bills to a minimum if not zero.
26 major businesses including household names such as Nike and FedEx pocketed federal tax rebates. In the last three years, these companies have managed to shrink down their federal tax payments to even zero on some occasions.
How did these companies manage to escape federal taxes?
Regardless of making a combined $40.5 billion worth of profits, these 55 Fortune 500 companies escaped the federal income taxes last year. Out of these 55 companies, ITEP listed out 26 companies that paid 0 dollars in federal tax for consecutive three years.
The bill that cut down the corporate tax rate to 21% from 35% was catering companies to straight away put down the cost of capital investments along with accelerated depreciation which empowered organizations to slash down their tax liabilities.
According to ITEP the $2.2 trillion CARES Act, a Covid-19 relief plan which was signed into law last year, imparted more avenues for tax recession. The act constituted a staple that allowed companies to make restitution to even out taxable profits in preceding years.
$8.5 billion failed to make it to tax rebates
According to the statements by ITEP, if the statutory 21% corporate tax rate was paid by those 55 companies on their 2020 profits, their combined tax bill of 2020 would have aggregated to $8.5 billion. Forget tax liabilities, these companies even procured collective tax rebates of $3.5 billion.
10 major Fortune 500 companies that paid $0 in federal income tax in 2020
Archer Daniels Midland relished a U.S. pretax income of $438 million last year. The federal tax rebate they received was $164 million.
- Industry:- Food processing commodities
- U.S. Pre-Tax Income:- $438.00
- Current Federal Income Tax:- $−164.00
- Effective Tax Rate:- −37.4 percent
FedEx, the shipping giant annihilate out their income tax on $1.2 billion of their 2020 U.S. pretax income. They amassed $230 million as their tax rebate.
- Industry:- Courier
- U.S. Pre-Tax Income:- $1,218.00
- Current Federal Income Tax:- $−230.00
- Effective Tax Rate:- −18.9 percent
Nike U.S. pretax income last year was $1.2 billion and the company paid zero bucks of federal income taxes. The shoe manufacturing company received a tax rebate of $109 million.
- Industry:- Apparel Accessories; Sports equipment
- U.S. Pre-Tax Income:- $2,873.00
- Current Federal Income Tax:- $−109.00
- Effective Tax Rate:- −3.8 percent
Dish Network on their U.S. pretax income of $2.5 billion paid zero federal income taxes.
- Industry:- Telecommunications
- U.S. Pre-Tax Income:- $2,532.00
- Current Federal Income Tax:- $−231.00
- Effective Tax Rate:- −9.1 percent
Salesforce had a U.S. pretax income of $2.6 billion to which the software company paid no federal income taxes.
- Industry:- Cloud computing Software
- U.S. Pre-Tax Income:- $2,630.00
- Current Federal Income Tax:- $−12.00
- Effective Tax Rate:- −0.5 percent
DTE Energy made a net income of US$1.368 billion to which they avoided all federal income taxes.
- Industry:- Utilities gas and electric.
- U.S. Pre-Tax Income:- $1,531
- Current Federal Income Tax:- $-247
- Effective Tax Rate:- -16.1 percent
Cabot Oil and gas made $200.5 million as their net income to which they avoided every dime to federal income taxes.
- Industry:- Oil, gas & pipelines
- U.S. Pre-Tax Income:- $240.00
- Current Federal Income Tax:- $−32.00
- Effective Tax Rate:- −13.2 percent
HP’s total net income for last year was US$2.84 billion to which they avoided all federal income taxes.
- Industry:- Computers, software, data
- U.S. Pre-Tax Income:- $861.00
- Current Federal Income Tax:- $−24.00
- Effective Tax Rate:- −2.8 percent
Seaboard’s annual net income was $283 million in 2020 to which they avoided all federal income taxes.
- Industry:- Food & beverages & tobacco
- U.S. Pre-Tax Income:- $136.00
- Current Federal Income Tax:- $−50.00
- Effective Tax Rate:- −36.8 percent.
Tyler Technologies revenue for the last quarter of 2020 was $0.283B to which they were empty hands for paying federal income taxes.
- Industry:- Computers, software data.
- U.S. Pre-Tax Income:- $176.00
- Current Federal Income Tax:- $−11.00
- Effective Tax Rate:- −6.0 percent
Joe Biden has unveiled his $2 trillion infrastructure plan later on down the road for United States infrastructure. The plan is majorly paid by raising taxes on corporations in the United States. It is pretty precise that if these companies are using U.S infrastructure, these corporations benefit from it more than anyone else. So there is no room for not paying taxes. Reimbursing these federal income taxes gives a substantial chance to help rehabilitate the nation’s deteriorating infrastructure and some Republicans are against it.
These corporations have been getting away with manipulating loopholes and paying nothing in taxes. Some of the broadly profitable businesses in the country paid no federal taxes and some of them still get subsidies back, so they made money from the government every year.