The identified companies were 'able to zero out their federal income taxes on $79 billion in U.S. pretax income,' according to the ITEP report.
Taxpayers are scrambling to make last-minute payments due to the Internal Revenue Service in just four days, but many of the country's largest publicly-held corporations are doing better: They've reported they owe absolutely nothing on the billions of dollars in profits they earned last year.
The controversial Tax Cuts and Jobs Act, signed by President Donald Trump in December 2017, lowered the corporate tax rate to 21 percent from 35 percent, among other cuts. That's partly to blame for giving corporations an easier way out of paying taxes, said Matthew Gardner, an ITEP senior fellow and lead author of the report. The new corporate tax rate"lowers the bar for the amount of tax avoidance it takes to get you down to zero," he said.
Moens credits his wife with getting their taxes filed early in February. They anticipated a refund, like in past years, because they overpaid during the year."It wasn't quite what Trump had said it was going to be," said Moens, who assembles farm planting tractors at the Moline factory."It was less than what we had received in previous years," although nothing had changed.
Corporations generally don't get"refund" checks as individuals do for overpaying. Instead, corporations calculate how much in taxes they owe by rolling up various deductions and tax credits that then lower the tax bill until, in many cases, they owe nothing in taxes or accrue a deficit, referred to as a rebate, that they use to offset taxes in the future.
Tax Foundation chief economist Kyle Pomerleau said the U.S. corporate tax law was"in need of reform." He said the new law reduced the U.S. rate to discourage companies from moving profits to countries with lower tax rates as well as allowing for certain deductions that encourage more immediate investment in factories and equipment.of profitable U.S. corporations that showed many paid zero taxes.
The Seattle-based retail and technology behemoth reported a federal tax rebate of $129 million on $10.8 billion in U.S. income before taxes. A number of companies accounted for the foreign profits payment in 2017 and 2018, resulting in significant tax bills.Under the new law, a company's income is only taxed in the country in which it is earned. The U.S. no longer taxes new foreign profits unless they reach a certain threshold, at which point the income is taxed at 10.5 percent, half that of the U.S. effective rate.
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