Corporate Taxes
Lawmakers Seek to Extend Tax Break for “Research” that Corporations Use to Develop Frozen Foods, New Beer Flavors, Casino Games and Tax Avoidance
December 8, 2022 • By Steve Wamhoff
If Congress creates a tax break to encourage businesses to conduct research that benefits society, should Netflix be eligible for it? There is no shame in binge-watching Stranger Things or Bridgerton or The Crown, but how many of us really think Netflix deserves a tax break for whatever “research” the company did to provide this […]
Reversing the Stricter Limit on Interest Deductions: Another Huge Tax Break for Private Equity
December 6, 2022 • By Steve Wamhoff
Private equity is doing fine on its own and does not need another tax break. Congress should keep the stricter limit on deductions for interest payments —one of the few provisions in the 2017 tax law that asked large businesses to pay a little bit more.
Twenty-Three Corporations Saved $50 Billion So Far Under Trump Tax Law’s “Bonus Depreciation” that Many Lawmakers Want to Extend
November 10, 2022 • By Matthew Gardner, Steve Wamhoff
Nearly two dozen of America’s largest corporations together received roughly $50 billion in tax breaks from 2018 through 2021 under a Trump tax law provision that many lawmakers now want to extend. Corporate lobbyists are even asking Congress to extend this “accelerated depreciation” tax break as part of a possible year-end tax bill.
Unfinished Tax Reform: Corporate Minimum Taxes
October 4, 2022 • By Steve Wamhoff
While the Inflation Reduction Act's corporate minimum tax is a huge improvement in our tax system, implementing the global corporate minimum tax would improve it much more. And if other governments implement the global minimum tax, the United States will have an even stronger interest in joining them to ensure that new revenue collected from American corporations flows to the U.S. rather than to other countries.
What Tax Provisions are in the Senate-Passed Inflation Reduction Act?
August 9, 2022 • By Steve Wamhoff
The Inflation Reduction Act approved by the Senate on Aug. 7 would raise more than $700 billion in new revenue over a decade by closing corporate tax loopholes, empowering the IRS to enforce the tax laws on the books, taxing stock buybacks, and extending a limitation on deductions for business losses. The IRA – if […]
Corporations are Shifting Profits to Wealthy Investors Tax-Free—Stock Buyback Tax Would Change That
August 5, 2022 • By Joe Hughes
Senate Democrats have announced an agreement on the Inflation Reduction Act that, among other changes to a previous version of the bill, would apply a 1 percent tax on corporations repurchasing their own stock. This proposal was included in the House-passed Build Back Better Act last year and was estimated at that time to raise $124 billion over 10 years. This measure would ensure that income transferred from corporations to wealthy shareholders does not continue to escape taxation.
Corporate Minimum Tax Examples: Apple Would Likely Pay More, 3M Would Not
August 5, 2022 • By Matthew Gardner
Apple, one of the largest corporations in the United States despite manufacturing most of its physical products offshore, would likely pay the corporate minimum tax that is included in the Inflation Reduction Act that the Senate is debating this week. 3M, a manufacturer that has about 40 percent of its workforce in the United States, likely would not pay the corporate minimum tax if current trends in the company’s profits and taxes continue, because it is already paying above 15 percent of its profits in taxes.
Opponents of Inflation Reduction Act Call for Continued Tax Avoidance by Large Manufacturers
August 2, 2022 • By Steve Wamhoff
The biggest revenue-raising provision in the Inflation Reduction Act, the 15 percent minimum tax for corporations that have more than a billion dollars in profits, is under attack from members of Congress who argue that manufacturing companies should not be required to pay any minimum amount of tax. Sen. Mike Crapo, the top Republican on […]
Most Senate Democrats Join Republicans in Calling for Corporate Tax Break
May 6, 2022 • By Steve Wamhoff
The vast majority of Senate Democrats joined their Republican colleagues in approving a new corporate tax break related to research in legislation that contains no offsetting corporate tax increases.
Excess Profits Tax Proposals Meet the Moment, But Lawmakers Should Keep Their Eye on Fundamentally Fixing Our Corporate Tax
March 25, 2022 • By Steve Wamhoff
New corporate tax proposals address the current situation, but ultimately leaders in Washington must fix federal law to tax all corporate profits and stop the tax dodging that is rampant today.
Taxes Should be Part of the State of the Union Agenda
March 1, 2022 • By Amy Hanauer
President Biden should elevate his tax and revenue proposals which remain essential if we are to pay for environmental restoration, health priorities and peacekeeping, the front-burner items that may dominate the speech.
Amazon Avoids More Than $5 Billion in Corporate Income Taxes, Reports 6 Percent Tax Rate on $35 Billion of US Income
February 7, 2022 • By Matthew Gardner
Amazon avoided about $5.2 billion of federal income tax on its record $36 billion in U.S. pretax income for fiscal year 2021.
Netflix Posts a Record $5.3 Billion in Profits and a Federal Tax Rate of Just 1.1 Percent
February 1, 2022 • By Matthew Gardner
Netflix's 2021 financial report shows it doubled its profits to $5.3 billion from the previous year and reported an effective federal corporate income tax rate of 1.1 percent.
Report Illustrates How 70 Corporations Could Be Affected by Minimum Tax Proposal in the Build Back Better Act
November 18, 2021 • By Matthew Gardner
Amazon, Bank of America, Facebook, FedEx, General Motors, Google, Netflix, PayPal, T-Mobile and Verizon are just a few of the 70 corporations that would have paid more taxes under the Democrats’ proposed Corporate Profits Minimum Tax (CPMT) if it had been in effect in 2020 according to a new report from Sen. Elizabeth Warren’s office with estimates verified by the Institute on Taxation and Economic Policy.
Democrats Seek to Eliminate the Stock Buyback Advantage
November 4, 2021 • By Joe Hughes
An important reform in the bill before Congress would tax stock buybacks in a way that is more comparable to how dividends are taxed. Corporations would be required to pay a tax equal to 1 percent of their stock repurchases, ensuring that profits shifted to shareholders in this way are subject to some federal tax.
Senate Democrats’ Corporate Minimum Tax Could Address the Worst Corporate Tax Dodging
October 27, 2021 • By Steve Wamhoff
There is no reason corporations reporting hundreds of millions, but not billions, of dollars in profits to their shareholders should be allowed to avoid paying taxes. Nonetheless, the corporate minimum tax is a huge step forward and a valuable component of the Build Back Better plan.
Why Congress Should Reform the Federal Corporate Income Tax
September 17, 2021 • By Joe Hughes, Steve Wamhoff
It is reasonable for corporations (and, indirectly, their shareholders) to pay taxes to support the government investments that make their profits possible, such as the highways that facilitate the movement of goods and people, the education and health care systems that provide a productive workforce, the legal system and the protection of property, all of which are vital to commerce. Corporate tax avoidance allows wealthy and powerful individuals to reap enormous benefits from these investments without contributing their fair share to support them.
Corporate Tax Avoidance Under the Tax Cuts and Jobs Act
July 29, 2021 • By ITEP Staff, Matthew Gardner, Steve Wamhoff
Thirty-nine profitable corporations in the S&P 500 or Fortune 500 paid no federal income tax from 2018 through 2020, the first three years that the Tax Cuts and Jobs Act (TCJA) was in effect. Besides the 39 companies that paid nothing over three years, an additional 73 profitable corporations paid less than half the statutory corporate income tax rate of 21 percent established under TCJA. As a group, these 73 corporations paid an effective federal income tax rate of just 5.3 percent during these three years.
Opposition to Biden’s Tax Plan Has Nothing to Do with Small Businesses or Family Farms
July 16, 2021 • By Steve Wamhoff
Special interests lobbying against President Joe Biden’s tax agenda claim that his proposed corporate income tax rate hike will harm small businesses and that his proposed capital gains tax reforms will hurt family farms. Both claims are absurd attempts by powerful interests to pretend they are defending the little guy.
Washington Post Confirms that Corporations Are Bolder than Ever in Claiming Dubious Tax Breaks
July 16, 2021 • By Steve Wamhoff
IRS budget cuts starting in 2010 have forced the agency to reduce its audit rate for corporations with $20 billion or more in assets from 98 percent to 50 percent. The Washington Post found that during the decade, the amount of “uncertain tax benefits” claimed by corporations increased 43 percent, from $164 billion in 2010 to $235 billion in 2020.
U.S. Should Pursue Biden’s Tax Legislation and International Tax Agreement on Separate Tracks
June 9, 2021 • By Steve Wamhoff
The agreement announced over the weekend from the finance leaders of the Group of 7 (G7) countries to allow governments to tax some corporate profits based on the location of sales and to implement a 15 percent global minimum tax is a major step forward—but in no way changes the need for Congress to enact President Joe Biden’s tax reforms right now.
IRS Clock Runs Out, Saving 14 Large Companies $1.3 Billion
May 18, 2021 • By ITEP Staff, Matthew Gardner, Steve Wamhoff
Each year, corporations publicly state that some of the tax breaks they claim are unlikely to withstand scrutiny from tax authorities. And each year, corporations report that they will keep some of the dubious tax breaks they declared in previous years simply because the statute of limitations ran out before tax authorities made any conclusions. This suggests that, perhaps because of cuts to its enforcement budget, the IRS is not even investigating corporations that publicly announce they have claimed tax breaks that tax authorities would likely find illegal.
Nike’s Tax Avoidance Response Does not Dispute It Paid $0 in Federal Income Tax
April 19, 2021 • By Matthew Gardner
It was (allegedly) P.T. Barnum who first said “there’s no such thing as bad publicity.” But the public relations professionals at the Nike Corporation clearly disagree with this maxim. Last week, after multiple media outlets, including the New York Times, wrote about ITEP’s conclusion that Nike avoided federal corporate income taxes under the Trump tax law, the company contacted these news organizations to… change the subject.
The High Cost of Corporate Tax Avoidance (Webinar)
April 8, 2021 • By Amy Hanauer, ITEP Staff, Matthew Gardner
When communities thrive, so do corporations. But when profitable corporations build their empires by exploiting the tax code, it is workers, the environment and our communities—not CEOs or shareholders—that are harmed. Amazon posted its highest U.S. profit ever for 2020, an unprecedented year defined by a pandemic. Yet the company sheltered more than half its profits from corporate taxes—legally. While the company may be one of the most recognizable tax avoiders, it's not an outlier.
55 Corporations Paid $0 in Federal Taxes on 2020 Profits
April 2, 2021 • By Matthew Gardner, Steve Wamhoff
At least 55 of the largest corporations in America paid no federal corporate income taxes in their most recent fiscal year despite enjoying substantial pretax profits in the United States. This continues a decades-long trend of corporate tax avoidance by the biggest U.S. corporations, and it appears to be the product of long-standing tax breaks preserved or expanded by the 2017 tax law as well as the CARES Act tax breaks enacted in the spring of 2020.
ITEP’s corporate tax research examines the tax practices of major corporations. Besides its corporate study on average effective tax rates paid by the nation’s largest, most profitable corporations, throughout the year, ITEP produces research on subjects such as offshore cash holdings, tax haven abuse, executive stock options and other tax loopholes. See ITEP’s more recent study of profitable corporations’ tax rates.
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