Bank of America, J.P. Morgan Chase, Wells Fargo, Amazon, and Verizon gathered a combined US$16 billion in tax breaks in 2018.
More than 90 big, successful and lucrative United States corporations, listed on the Fortune 500 list paid zero dollars in federal income taxes in 2018, according to a report published Monday by the Institute on Taxation and Economic Policy (ITEP).
Among the more than 90 companies, ranked in the 500 of the largest U.S. corporations by total revenue for their respective fiscal years, are famous corporate giants such as Amazon, Halliburton, Chevron, Starbucks, and Delta Air Lines.
ITEP inspected the financial filings from 379 Fortune 500 companies “that were profitable in 2018 and that provided enough information to calculate effective federal income tax rates, which is the share of 2018 pretax profits they paid in federal income taxes in that year.”
In 2018 it was the first year President Donald Trump's tax cuts became operative, drastically reducing the tax rate for corporations from 35 to 21 percent.
ITEP found that 91 of the 379 companies analyzed took advantage of breaks and loopholes to avoid paying federal income taxes despite making a combined profit of US$101 billion.
Bank of America, J.P. Morgan Chase, Wells Fargo, Amazon, and Verizon gathered a combined US$16 billion in tax breaks in 2018, thanks to the Republican tax law signed by Trump signed in 2017.
Amazon CenturyLink Chevron Deere Delta Air Lines Eli Lilly FedEx Gannett General Motors Goodyear Honeywell JetBlue MGM Resorts Netflix Prudential Financial Starbucks Whirlpool
Total federal income tax paid by these companies last year: $0
"The 379 profitable corporations identified in this study paid an effective federal income tax rate of 11.3 percent on their 2018 income, slightly more than half the statutory 21 percent tax," ITEP said. "The 11.3 percent effective tax rate found in this study is likely the lowest effective tax rate in the last 40 years."
Senior fellow at ITEP and lead author of the report Matthew Gardner said the 2017 Trump tax law was "destined to fail to live up to its grand promises."
"Proponents of the law claimed it would boost federal corporate tax revenue, but that is nearly impossible since the law not only reduced the corporate tax rate, it also left some of the most egregious loopholes intact," Gardner said in a statement. "The 2017 tax law was a clear giveaway to corporations and their shareholders."
"The key takeaway from this study is that the 2017 tax law is working out well for profitable corporations, which are paying some of the lowest tax rates that ITEP has recorded in the nearly 40 years it has been examining corporate taxes," said the expert.
"By enacting a law that dramatically reduced corporate tax collections, lawmakers weakened the nation's ability to adequately fund critical priorities," Gardner added.
According to an analysis of tax data by the University of California at Berkeley's Emmanuel Saez and Gabriel Zucman for their upcoming book "The Triumph of Injustice," billionaires paid 23 percent of their income in federal, state, and local taxes in 2018, while the average U.S. citizen, meanwhile, paid 28 percent.