More than two dozen large U.S. companies have earned $ 77 billion in domestic profits in the past three years without expecting to have to pay federal taxes immediately for their reward. In fact, they haven’t spent a single dollar on current federal taxes since Donald Trump pushed for a massive tax cut for businesses in the first year of his presidency, according to a new study.
Many of these same companies had paid together billions of dollars in annual taxes before the Trump presidency.
For example, Salesforce.com has earned $ 4.2 billion in the last three years before taxes. But since 2018, the software company has left no money aside to pay federal taxes, according to its statements to securities regulators. In fact, Salesforce contracted $ 4 million in tax credits from 2018. In the three years prior to Trump’s tax cuts, Salesforce earned much less, but spent much more on taxes: $ 35 million for profits of $ 500 million.
A Salesforce spokesman did not answer a question from CBS MoneyWatch about how much the company has paid in taxes.
The study, from the liberal-leaning Institute for Economic and Tax Policy, comes as the national debate heats up over whether companies pay their fair share of taxes. This week, President Joe Biden said he hopes to significantly raise corporate taxes to help pay off a $ 2 trillion plan to improve the country’s infrastructure, which could cost the federal government billions of dollars.
Friday, Biden said his infrastructure proposal it is an investment “once in a generation in the future, which is paid by asking large corporations, many of which do not pay taxes, to pay their fair share.”
Earlier this week, Biden outlined a plan increase what U.S. companies pay in federal taxes by $ 2 trillion over the next decade. It includes imposing a minimum corporate tax rate of 15% based on the income that companies report to investors.
How much in corporate taxes according to the Biden plan?
If Mr. Biden’s plan had been in place, the 26 profitable companies featured in the ITEP study would have paid at least $ 11.6 billion in federal taxes since 2018, instead of the nearly $ 5 billion in tax credits they charged. during this time.
“There is already this suspicion that large companies are not paying their fair share,” said Matthew Gardner, a senior member of ITEP and one of the study’s authors. “A finding like this will support this vision.”
While it’s clear that companies pay significantly less than they did before Trump’s tax cuts, it’s less certain than how much a particular company contributes to taxes. The reason: companies, like individuals, can keep their tax returns and payments private.
However, public companies that report their profits to investors should also offer in their financial records an approximate approximation of what they should pay in taxes over the next twelve months and the tax costs they may face in the future. . They should also detail who is likely to pay these taxes, such as the federal government, a state, or foreign governments.
The ITEP study focused on the current amount of federal income tax that companies listed on the S&P 500 stock index have spent in the past three years. Accounting experts have traditionally said that this figure provides a pretty good estimate of what companies may have paid in federal taxes. Less useful, the provisions of the 2017 tax reduction law have made this figure less reliable.
For example, ITEP identified FedEx as a company that has not paid federal taxes in the past three years. He the cast giant has previously contested this statement, saying he pays annual federal income taxes while declining to disclose how much. FedEx’s financial statements show that its cash accounts (another way to measure corporate profits) fell by $ 400 million due to tax payments over the past three years.
Tax rates on the low
However, what many American companies pay in taxes can cause envy among individual taxpayers. A recent financial presentation indicated that Zoom, whose revenue and profits have increased during the Coronavirus pandemic, it had did not pay any federal taxes for 2020 despite the videoconferencing company’s record gains.
According to a CBS MoneyWatch analysis of FactSet data, the average corporate corporate tax rate of the S&P 500 last year was only 18%, 23% less than in 2017. It’s especially for all taxes paid. Just look at federal income taxes and the effective rates for these businesses are likely to be much lower.
Duke Energy, for example, made previous U.S. profits of nearly $ 8 billion over the past three years. Duke not only paid zero federal taxes during that time, but also set aside an income tax credit of just over $ 1.2 trillion, according to ITEP.
In response to the study, Duke Energy told the New York Times that investments in renewable energy have allowed it to delay, but not eliminate, its federal tax obligations. The company’s most recent annual financial filing recorded a $ 9 billion liability for future federal tax payments.
Other major companies that ITEP researchers said have not paid federal taxes in recent years despite making big profits include Internet and TV provider Dish Network and sports equipment company Nike.
On Friday, in response to the study, Vermont Sen. Bernie Sanders tweeted that a pair of $ 120 Nike Air Force 1 shoes would cost you more than the company paid in taxes for the past three years.
A Nike spokesman did not respond to any requests for comment.
ITEP also identified 55 companies that made money in the past, but did not appear to have paid federal tax money for those benefits. For example, the study said cable company Charter Communications earned $ 3.6 billion during the pandemic, but last year set aside a $ 7 million tax credit.
Charter Communications did not respond to a request for comment.