A new study has revealed that some 26 Fortune 500 companies, including FedEx and Nike, paid no federal income tax for the past three years.
Thanks to a sweeping 2017 tax bill passed by a then-Republican-dominated Congress and signed into law by Donald Trump, these large corporations were once against shielded by conservatives from having to pay their fair share like the middle class is forced to do.
Not only did Trump reduce the corporate tax rate from 35 percent to 21 percent, but said bill also shrunk the corporate tax bill even further – in some cases all the way to zero.
The Institute on Taxation and Economic Policy (ITEP) further found that many of these companies actually received negative tax payments, meaning they were subsidized by taxpayers on top of not paying any taxes.
One such company is Duke Energy, a nuclear-dominated energy provider in the South that paid -15.5 percent in federal taxes over the past three years – meaning Duke was paid by taxpayers to do business while paying no taxes itself.
Another is Nike, which raked in -18 percent in federal tax payments throughout Trump’s term in the White House.
Other well-known corporate names that likewise benefitted under Trump and the Republicans’ tax cuts for corporations and the rich include Dish Network, Xcel Energy, Salesforce.com, Archer-Daniels-Midland, and Penske Automotive Group.
Though companies’ tax returns are private, publicly traded corporations are required to file financial reports that include data on their federal income tax expense. These reports were the sources used in the new study.
In an attempt to defend itself, Duke Energy, one of the corporations that benefitted most from the Trump tax cuts, had spokeswoman Catherine Butler issue a statement about how Duke “fully complies with federal and state tax laws as part of our efforts to make investments that will benefit our customers and communities.”
According to Butler, Duke’s bonus depreciation caused Duke’s cash tax obligations “to be deferred to future periods, but it did not eliminate them.” A 2020 end-of-year filing suggests that Duke has a deferred federal tax balance of $9 billion, Butler claims.
DTE Energy, which is based out of Detroit, offered similar excuses for its tax burden of zero.
“For utilities, the benefit of these federal tax savings are [sic] passed on to utility customers in the form of lower utility bills,” the company said in a statement about how it renovated its aging infrastructure last year and still paid no federal taxes.
As it turns out, the 2017 Trump tax cut bill allowed businesses to immediately write off the costs associated with new equipment and machinery, which is exactly what DTE and the other companies have been doing.
The deal for large corporations got even richer with the passage of the $2.2 trillion CARES Act. A key provision in this bill allows corporations to temporarily use losses in 2020 to offset profits earn in previous years.
“DTE used that provision to get an accelerated refund of credits representing $220 million of previously paid alternative minimum taxes,” reported The New York Times.
FedEx also took advantage of this CARES Act provision, which the company used to pay no taxes – or as its spokespeople say, “helped companies like FedEx navigate a rapidly changing economy and marketplace while continuing to invest in capital, hire team members, and fund employee pension plans.”
“The fact that a lot of companies aren’t paying taxes says there are a lot of provisions and preferences out there,” admits Alan D. Viard, a resident scholar at the conservative research group American Enterprise Institute.
More news stories like this one, by the way, can be found at Corruption.news.
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