Trump and congressional Republicans have repeatedly vowed to cut corporate taxes, complaining that the current 35 percent corporate tax rate puts American corporations at a competitive disadvantage worldwide.
Rubbish.
A new report from the Institute on Taxation and Economic Policy (see below) shows that 258 of America’s most profitable large companies -- which earned a total of more than $3.8 trillion in profits -- paid zero taxes at least one year between 2008 and 2015. And 18 of them -- including General Electric, International Paper, Priceline.com and PG&E -- incurred a total federal income tax bill of less than zero over the entire eight-year period — meaning they received rebates from the government. (The institute used the companies’ own regulatory filings to compute their tax rates.)
How did they accomplish this? By taking advantage of tax loopholes which in many instances their own lobbyists had a hand in putting into the tax code. For example:
1. Facebook, Aetna and Exxon Mobil, among others, saved billions by giving options to top executives to buy stock in the future at a discount. The companies then got to deduct their huge payouts as a loss. Facebook used excess tax benefits from stock options to reduce its federal and state taxes by $5.78 billion from 2010 to 2015.
2. Others, like American Electric Power, Con Ed and Comcast, qualified for accelerated depreciation, which allowed them to write off most of the cost of equipment and machinery even before it wore out.
3. Others got special tax breaks unique to their industry or company: Utilities logged an effective tax rate of just 3.1 percent over the eight-year period, because of special tax breaks. Industrial machinery, telecommunications and oil, gas and pipeline companies paid roughly 11.5 percent. Internet services paid 15.6 percent. Other tax subsidies went for drilling for gas and oil, building Nascar racetracks or railroad tracks, roasting coffee, undertaking certain kinds of research, producing ethanol or making movies (which saved the Walt Disney Company $1.48 billion over eight years, the report says).
Companies with the biggest tax subsidies over the eight years:
■ AT&T ($38.1 billion)
■ Wells Fargo ($31.4 billion)
■ JPMorgan Chase ($22.2 billion)
■ Verizon ($21.1 billion)
■ IBM ($17.8 billion)
■ General Electric ($15.4 billion)
■ Exxon Mobil ($12.9 billion)
■ Boeing ($11.9 billion)
■ Procter & Gamble ($8.5 billion)
■ Twenty-First Century Fox ($7.6 billion)
■ Time Warner ($6.7 billion)
■ Goldman Sachs ($5.5 billion)
Not surprisingly, these are also among America's biggest lobbyists.
Before Trump and the Republicans give big corporations even more tax cuts, they should drain the swamp.
