KEY FACTS
- Analysts determined that the 55 companies, all part of the S&P 500 or Fortune 500, would have paid a combined total of $8.5 billion last year if they had paid at a 21% rate (the statutory federal corporate tax rate) on their profits.
- Not only did they avoid paying any taxes on their profits, but these companies also received $3.5 billion in tax rebates, according toITEP, a left-leaning, non-profit research group that analyzed each firm’s annual financial reports.
- Tax breaks for executive stock options, a provision allowing companies to write off capital investments, federal research and experimentation credits, and tax breaks for renewable energy were some of the legal deductions and exemptions utilized by these businesses to reduce their tax bill dramatically.
- 26 of the 55 companies, including Nike, which reported more than $2.8 billion of pretax income last year, and FedEx, which generated $1.2 billion, avoided paying any federal income tax in each of the past three years, according to the report.
- In an emailed statement to Forbes, a FedEx spokesperson said, “The CARES Act, which was enacted in March 2020, 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.”
In December of 2017, then-President Trump signed the Tax Cuts and Jobs Act into law, introducing far-reaching changes to the tax code. In addition to slashing the corporate rate from 35% down to 21%, the $1.5 trillion bill provided tax breaks to owners of pass-through companies, whose profits would be taxed through the individual code. Although tax returns are not made public, the Securities and Exchange Commission requires publicly traded companies to disclose pretax income. ITEP analysts were able to mine this data and other information released by each company to determine each corporation's effective tax rate.
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