Category: Corporate Taxes
-
Richard Phillips
Senior Policy AnalystSen. Amy Klobuchar (D-MN) and several Senate co-sponsors this week introduced the Removing Incentives for Outsourcing Act, which curbs harmful new incentives created by the Tax Cuts and Jobs Act (TCJA) that encourage companies like GM to move their profits and operations offshore. -
Matthew Gardner
Senior FellowNovember 27, 2018
GM Announcement Confirms Tax Cuts Don’t Prevent, May Encourage Layoffs
GM’s most recent quarterly financial report reveals the company has saved more than $150 million so far this year due to last year’s corporate tax cuts. So the layoffs announcement may seem especially jarring to anyone who believed President Trump’s claim that his tax cuts would spur job creation—including the Ohio residents Trump told directly “don’t sell your homes” because lost auto-making jobs “are all coming back.” -
Steve Wamhoff
Federal Policy DirectorMany Americans sense that the tax code is riddled with unnecessary and costly breaks for big business, but if asked to name one, few would reply “accelerated depreciation.” While they may seem arcane, tax breaks like “full expensing” and other types of accelerated depreciation are among the central problems in our tax code. A new report from ITEP makes the case that any serious tax reform would repeal or sharply curb these provisions. -
Carl Davis
Research DirectorNovember 13, 2018
Three Tax Takeaways on Amazon’s Expansion Announcement
Today Amazon announced major expansions in New York and Virginia, where it intends to hire up to 50,000 full-time employees. The announcement marks the culmination of a highly publicized search that lasted more than a year and involved aggressive courting of the company by cities across the nation. The following are three tax-related observations on the announcement. -
ITEP Staff
Comparing the year’s first three quarterly filings of 2018 with those of 2017, we find that 15 of the largest Fortune 500 companies reported worldwide effective income tax rates declining by an average of 10.4 percentage points and by as much as 16 percentage points. In total these companies owed $22.3 billion less in taxes than they would have under their 2017 effective rates, saving an average of $1.5 billion each. -
A new report by Hubertus Wolff and Michael Overesch finds that public country-by-country reporting (CBCR) can have a significant fiscal impact. In fact, the report shows that new CBCR rules applied to European banks appear to have substantially increased the tax rates paid by banks that engage in tax-haven activities. This means that CBCR may not just improve the integrity of the tax system and provide critical information so investors can gauge investment risks, but may also have a much more immediate impact on curbing tax avoidance. -
Richard Phillips
Senior Policy AnalystA recently released working paper from Kimberley Clausing of Reed College finds that U.S. corporations will avoid taxes on nearly $300 billion in offshore profits every year for the foreseeable future. The paper provides an informative new look into the level of offshore tax avoidance before and after the Tax Cuts and Jobs Act (TCJA). While advocates of the TCJA claimed the tax law would end tax haven abuse through lowering the statutory rate and other measures, Clausing’s analysis shows that the TCJA will still allow the vast majority of offshore tax avoidance to remain intact. -
ITEP Staff
Earlier this week, the Treasury Department reported that the federal deficit this fiscal year climbed by 17 percent to $779 billion, and next year is expected to be at least $1 trillion. The increased deficit comes after Congress last December passed an unpopular tax cut (The Tax Cuts and Jobs Act) that will cost nearly $2 trillion over a decade. GOP leaders repeatedly claimed the measure would pay for itself and not increase annual deficits, in spite of multiple economic predictions to the contrary. -
Elise J. Bean’s Financial Exposure reiterates the point that tax avoidance and tax evasion were endemic to our financial system long before allegations against a sitting president brought them to the forefront of the public consciousness. -
The report indicates, pharmaceutical companies have taken steps to hide their profits in low-tax countries, sapping billions in revenue from the governments that invest in the science that drives their products and safeguard the patents that undergird their business. Pharmaceutical companies made use of a familiar battery of methods to exploit the international system this way, including inversions to disguise an American company as a foreign one and passing profits into low-tax jurisdictions through artificial usage fees on intangible assets like intellectual property. -
Richard Phillips
Senior Policy AnalystA new study by the Federal Reserve found that the evidence so far suggests that the new repatriation tax break has resulted in a surge in stock buybacks and little discernable impact in investment by its biggest beneficiaries, just as critics predicted. -
Richard Phillips
Senior Policy AnalystJuly 17, 2018
How to Fix the Broken International Corporate Tax Code
How should lawmakers fix the system? A new ITEP report breaks down how the international corporate tax code under the TCJA works, and how lawmakers can fix it. The report lays out three key principles for reform: equalize the rates, eliminate inversions, and create transparency. -
Richard Phillips
Senior Policy AnalystOne simple rule should drive the nation’s international tax policies: tax the offshore profits of American companies the same way their domestic profits are taxed. The latest legislation to approach that ideal is the Per-Country Minimum Act (H.R. 6015), from Rep. Peter DeFazio (D-OR). The DeFazio bill closes the loophole that allows corporations to use foreign tax credits to shelter profits in tax havens from U.S. taxes. No other bill addresses this. -
Richard Phillips
Senior Policy AnalystIn advance of its annual shareholders meeting on May 31, Facebook was confronted with a shareholder resolution asking it to endorse a set of principles to guide its tax policy and to ensure that such principles consider the impact of its tax strategies on local economies and public services. The resolution is a signal from a group of concerned shareholders that Facebook’s tax avoidance hurts its reputation, the communities in which it operates, and creates financial risks to the company’s shareholders. -
Matthew Gardner
Senior FellowBy now, it should come as no shock that profitable Fortune 500 corporations are reaping huge benefits from the corporate tax cuts enacted last December. But as first quarter earnings reports are released, we’re learning just how big. -
Matthew Gardner
Senior FellowIn reports released over the past week, covering the first three months of 2018, a few of the biggest and most profitable Fortune 500 corporations acknowledge receiving billions in tax cuts in the first quarter of 2018 alone. Fifteen of these companies collectively disclosed reducing their effective tax rates by $6.2 billion compared to the rates they faced in the first quarter of last year. -
Richard Phillips
Senior Policy AnalystThe HBO television show Last Week Tonight with John Oliver has become known for its longer segments that examine important issues facing the country. In its latest segment on Sunday, the show took a deep dive into corporate taxes and how many companies manage to avoid paying their fair share. Between its hilarious interludes, the segment painted a striking portrait of problems in our corporate tax code and how the Tax Cuts and Jobs Act (TCJA) failed to address them. -
Carl Davis
Research DirectorApril 11, 2018
ITEP Resources on Amazon and the Online Sales Tax Debate
The U.S. Supreme Court is scheduled to consider a case next week (South Dakota v. Wayfair, Inc.) that has the potential to significantly improve states and localities’ ability to enforce their sales tax laws on Internet purchases. -
ITEP Staff
March 30, 2018
Amazon’s Local, State and Federal Tax Issues Explained
President Trump’s latest Twitter target, the Amazon Corporation, is now under the microscope for its state and local tax avoidance. In a Thursday tweet, the President claimed that “[u]nlike others, they pay little or no taxes to state & local governments.” Such a statement is a startling reversal for a president who previously said his own ability to avoid paying income taxes “makes me smart.” -
Matthew Gardner
Senior FellowFor the second time in seven months, President Trump will visit a Boeing factory to hype corporate tax cuts. He’s chosen the wrong poster child. If there was something preventing the aerospace giant from expanding its business before the Trump-GOP tax law, it certainly wasn’t taxes. Boeing made headlines in 2016 only because after years of paying zero in federal taxes, it finally paid something. Over 10 years (2008 to 2017), the company paid an effective federal tax rate of 8.4 percent on $54.7 billion of U.S. profits. -
Matthew Gardner
Senior FellowThe tobacco company Reynolds American announced this week that its full-time employees will receive a one-time bonus of $1,000 in the wake of a sharp reduction in its British parent company’s tax bill. -
Aidan Davis
State Policy DirectorCorporate America is doing alright. Corporate profits soared last year, and 2018 has already brought a major windfall in the form of the Trump-GOP tax law, which dramatically cut the federal corporate tax rate from 35 percent to 21 percent and shifted to a territorial tax system, giving income earned offshore by U.S. companies a free pass by no longer making it subject to U.S. taxes. -
Matthew Gardner
Senior FellowThe online retail giant has built its business model on tax avoidance, and its latest financial filing makes it clear that Amazon continues to be insulated from the nation’s tax system. In 2017, Amazon reported $5.6 billion of U.S. profits and didn’t pay a dime of federal income taxes on it. The company’s financial statement suggests that various tax credits and tax breaks for executive stock options are responsible for zeroing out the company’s tax this year. -
Matthew Gardner
Senior FellowIn the runup to last fall’s tax debate, it was commonly observed that corporate tax reform is both easy and hard: the easy part is cutting the rate, and the hard part is paying for it by closing loopholes. The real test of Congress’ determination to achieve tax reform would be whether they would stand up to corporate lobbyists and shut down loopholes like accelerated depreciation that allow profitable companies to pay little or no income tax. As is now widely known, Congress was not especially determined: lawmakers aggressively cut the corporate rate from 35 to 21 percent, but then expanded depreciation tax breaks instead of repealing them. This week the utility giant (and notable tax avoider) PG&E released its annual financial report assessing the short-term impact of the tax bill on its bottom line. The report shows that even after taking a short-term $147 million tax hit in 2017, the company still won’t pay a dime of current federal income taxes, on balance, on $2.1 billion of income overall. -
Matthew Gardner
Senior FellowJanuary 31, 2018
How Exxon’s Empty $50 Billion Promise Made Its Way into Trump’s SOTU
Never one to let the truth get in the way of a good story, House Speaker Paul Ryan immediately published a press release with the headline, “ExxonMobil to Invest an Additional $50 Billion in the U.S. Due to Tax Reform.” The statement was completely faithful to ExxonMobil’s statement, except for the words “additional” and “due to tax reform.” Not to be outdone, President Trump implied during his State of the Union address that the company was investing $50 billion in response to the new tax law. But a closer examination of ExxonMobil’s recent history of domestic spending finds that the “new” $50 billion investment is less than what the company invested over the previous five years.
Blog Categories
- Corporate Taxes
- Earned Income Tax Credit
- Education Tax Breaks
- Federal Policy
- Fines and Fees
- Immigration
- Inequality and the Economy
- Local Income Taxes
- Local Policy
- Local Property Taxes
- Local Refundable Tax Credits
- Local Sales Taxes
- Maps
- Personal Income Taxes
- Property Taxes
- Refundable Tax Credits
- Sales, Gas and Excise Taxes
- SALT Deduction
- State Corporate Taxes
- State Policy
- Tax Analyses
- Tax Basics
- Tax Credits for Workers and Families
- Tax Reform Options and Challenges
- Taxing Wealth and Income from Wealth
- Trump Tax Policies
- Who Pays?