Here are some claims the President made during his State of the Union address, along with the facts.
Corporate Taxes
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 comprehensive study of profitable corporations’ tax liability.
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blog January 31, 2018 Fact-Checking Trump’s State of the Union Address on Tax Issues
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blog January 26, 2018 Moody’s and Conservative Economists Agree: The Trump Corporate Tax Cut Is Not Helping Workers
Moody’s does not believe that corporate tax cuts are trickling down to working people as bonuses and pay raises. The real problem with the corporate PR campaign is that even those economists who supported Trump’s corporate tax cut and claimed it would help workers do not believe that it works this way.
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blog January 24, 2018 It’s a Small Bonus After All
The Walt Disney Corporation announced this week that in the wake of the new tax bill’s passage, it will spend $125 million on one-time bonuses and $50 million on an education program for some employees, all in 2018. This $175 million spending commitment is notable for two reasons: it’s temporary, and it’s a drop in the bucket for a company that’s likely to see annual tax savings of $1.2 billion a year and has already committed to a $50 billion-plus corporate acquisition of 21st Century Fox’s assets.
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blog January 18, 2018 Apple Gambled on Congressional Spinelessness on Tax Policy— and Won
Now, Apple Inc. would like the American public to know that it has “a deep sense of responsibility to give back to our country” a small fraction of its multi-billion-dollar tax cut haul. However, the company’s splashy press release is devoid of any specifics on the jobs it will create as a result of the tax bill. Like other corporate announcements, the company’s recent proclamation of newfound patriotism should be viewed as a public relations ploy designed to convince a skeptical public that working families will see some trickle-down benefit from this historic corporate giveaway.
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blog January 12, 2018 The Walmart Smiley Face Is Lying: Corporate Tax Cuts Are Not Causing Pay Raises and Bonuses
Last night, Yahoo reported that 81 corporations had announced pay raises and bonuses that they claim result from the Trump-GOP tax law’s reduction in the official corporate tax rate from 35 percent to 21 percent. Of these 81 corporations, 13 were included in ITEP’s most recent corporate tax study, which focuses on the Fortune 500 companies that were profitable every year from 2008 through 2015. These 13 companies had a combined effective tax rate of just 19.1 percent, which undermines the idea that the federal corporate tax rate was holding back their ability to pay workers.
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blog January 12, 2018 Walmart’s Minimum Wage Hike: Did the Tax System Make Them Do It?
The Walmart corporation announced this week that it will increase its minimum wage to $11 an hour, in a move that the company attributed to the major corporate tax cut signed into law by President Trump last month. The $300 million the company will spend on the wage boost is just a fraction of the more than $2 billion a year ITEP estimates Walmart could net from the corporate tax rate cuts that took effect January 1—but even so, the company felt the need to make the wage boost more affordable by simultaneously closing 63 Sam’s Club stores and laying off thousands of employees. For all the press fanfare surrounding the wage announcement, the quiet layoffs are likely a more meaningful indicator of what awaits the American worker in the wake of the Trump tax cuts.
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blog December 22, 2017 Corporate America, You Just Got a $650 Billion Tax Cut! What Are You Going to Do Next?
While many Fortune 500 CEO’s likely had to restrain themselves from preemptively shouting “we’re going to Disneyland” in an homage to the Disney Corporation’s trademark ad spot involving the winner of each year’s Super Bowl, it’s pretty understandable that several of them—including known tax avoiders AT&T, Boeing, Comcast and Wells Fargo—would preemptively make grandiose promises that they will reserve part of their tax cuts for the little people who made it all possible.
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blog December 19, 2017 The Trump-GOP’s Big Giveaway to Multinational Corporations
The tax bill just approved by Congress was a golden opportunity to solve these problems for good—but turned out to be a colossal missed opportunity. Instead of addressing the hundreds of billions in lost federal tax revenue due to offshore tax avoidance schemes, the Trump-GOP tax bill would forgive most of the taxes owed on the profits held offshore right now and open the floodgates to even more offshore profit-shifting in the future.
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report December 16, 2017 Multinational Corporations Would Receive $413 Billion in Tax Breaks from Congressional Repatriation Proposal
Rather than making companies pay what they owe, the final legislation reported out of conference proposes to tax accumulated offshore earnings at a rate lower than the 35 percent that they owe under current law. The final bill would tax offshore earnings being held as cash at a rate of 15.5 percent and tax all other offshore earnings at a rate of 8 percent. According to the Joint Committee on Taxation, this proposal would allow U.S. companies to collectively pay about $339 billion in taxes on their offshore earnings, rather than the roughly $752 billion that they owe, meaning that this proposal would give U.S. multinationals a tax break of $413 billion.
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blog November 21, 2017 The Senate Tax Plan’s Big Giveaway to Multinational Corporations
Instead of addressing the hundreds of billions in lost federal tax revenue due to offshore tax avoidance schemes, the Senate tax bill would forgive most of the taxes owed on these profits and open the floodgates to even more offshore profit-shifting in the future.
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blog November 14, 2017 Shopping for a Tax Haven: How Nike and Apple Accelerated Their Tax Avoidance Strategies, according to the Paradise Papers
A year and a half after the release of the Panama Papers, a new set of data leaks, the Paradise Papersreleased by the International Consortium of Investigative Journalists (ICIJ) provides important new information on the tax dodging of wealthy individuals as well as multinational corporations.
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blog November 8, 2017 House Tax Plan Would Make Offshore Tax Avoidance Substantially Worse
The Sunday release of the Paradise Papers has once again brought the issue of offshore tax avoidance to the forefront of public discussion. The papers expose the complex structures that companies such as Apple and Nike have pursued in recent years to pay little to nothing in taxes on their offshore earnings.
Yet even as these revelations make headlines, House Republicans are moving forward with major tax legislation, the Tax Cuts and Jobs Act, that would reward the worst tax avoiders and make it even easier for multinational companies to avoid taxes.
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report November 5, 2017 American Corporations Tell IRS that 61 Percent of Their Offshore Profits Are in 10 Tax Havens
Recent revelations that a Bermuda law firm helped facilitate offshore tax avoidance has heightened awareness of the vast amount of income and wealth flowing into tax and secrecy havens worldwide. The countries through which this firm helped funnel global elites’ assets also act as tax havens for multinational corporations. Recently released data from the Internal Revenue Service show that U.S. corporations claim that 61 percent of their foreign subsidiaries’ pretax worldwide income is being earned in 10 tiny tax haven countries.
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news release November 5, 2017 Paradise Papers Underscore Why Lawmakers Should Focus on Offshore Tax Avoidance
Following is a statement by Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy, regarding the release of the “Paradise Papers,” a series of documents from Appleby, a leading offshore law firm. The International Consortium of Investigative Journalists released the investigative report today.
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report November 5, 2017 Fact Sheet: Nike and Tax Avoidance
Nike earned more than $10 billion in U.S. profits from 2008 to 2015 but only paid 18.6 percent in U.S. federal taxes during this time. This is just over half of the official U.S. corporate tax rate of 35 percent.
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report November 5, 2017 Fact Sheet: Facebook and Tax Avoidance
Since Facebook became a public company, its annual revenues have increased by 250 percent from around $8 billion in 2013 to nearly $28 billion last year. In the same time period, the company’s before-tax profits shot up four-and-a-half fold to $12.5 billion. But in this time it has also managed to avoid billions of dollars in U.S. taxes.
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report November 5, 2017 Fact Sheet: Apple and Tax Avoidance
Apple is the most valuable public company of all time with a market value of more than $800 billion. Last year, it cleared $45.7 billion[iii] in profits after taxes, making it the most profitable company in the Fortune 500 for the third straight year.
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blog October 30, 2017 The Manufacturing Deduction Is a Case Study in Tax Policy Gone Wrong
When you think of manufacturing, what comes to mind? According to the U.S. Congress, manufacturing may include things like the production of wrestling-rated films, assembling bouquets of flowers and even slicing cheesecake. These unusual definitions of manufacturing come from the domestic production activities deduction (better known as the manufacturing deduction), a tax break Congress created to encourage manufacturing in the United States.
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report October 26, 2017 The Domestic Production Activities Deduction: Costly, Complex and Ineffective
When the Domestic Production Activities Deduction (DPAD) became law in 2004, proponents described it as a way to help American companies manufacture in the United States and export products abroad. In recent years, the DPAD has grown into one of the largest corporate tax expenditures, with an estimated cost of more than $15 billion in 2016 and $174 billion over the next 10 years.
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blog October 18, 2017 The Corporate Tax Code is in Dire Shape, But Trump-GOP Plan Would Make It Worse
Just how bad has the corporate tax code gotten? The newest edition of Offshore Shell Games, a joint report by the Institute on Taxation and Economic Policy (ITEP) and U.S. PIRG, outlines the massive scale of the offshore tax avoidance undertaken by U.S. multinationals. It’s well known that Fortune 500 companies have accumulated a stash of $2.6 trillion in earnings offshore, which has allowed them to avoid an estimated $752 billion in taxes.
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report October 17, 2017 Offshore Shell Games 2017
This study explores how in 2016 Fortune 500 companies used tax haven subsidiaries to avoid paying taxes on much of their income. It reveals that tax haven use is now standard practice among the Fortune 500 and that a handful of the country’s biggest corporations benefit the most from offshore tax avoidance schemes.
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report September 6, 2017 Turning Loopholes into Black Holes: Trump’s Territorial Tax Proposal Would Increase Corporate Tax Avoidance
The problem of offshore tax avoidance by American corporations could grow much worse under President Donald Trump’s proposal to adopt a “territorial” tax system, which would exempt the offshore profits of American corporations from U.S. taxes. This change would increase the already substantial benefits American corporations obtain when they use accounting gimmicks to make their profits appear to be earned in a foreign country that has no corporate income tax or has one that is extremely low or easy to avoid.
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blog August 31, 2017 Trump (Sort of) Used Our Data on Corporate Tax Avoidance, But He Missed the Point
On Wednesday, reporters waiting to write about President Trump’s much-ballyhooed tax reform speech in Missouri received a fact sheet from the White House informing them that, “Fortune 500 corporations are holding more than $2.6 trillion in profits offshore to avoid $767 billion in Federal taxes, according to the Institute on Taxation and Economic Policy.”
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blog August 23, 2017 GOP Leaders Tout Corporate Tax Cuts at Boeing and AT&T, Companies that Already Have Single-Digit Tax Rates
House Speaker Paul Ryan plans to visit a Boeing factory in Washington State tomorrow to promote the GOP’s ideas for tax reform, which include a deep cut in the corporate tax rate, while House Ways and Means Chairman Kevin Brady is bringing the same message today to employees of AT&T in Dallas. What is unclear is how much lower taxes for these companies can possibly go.
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blog August 4, 2017 How to Think About the Problem of Corporate Offshore Cash: Lessons from Microsoft
For a corporation with deeply American roots, Microsoft seems remarkably unable to turn a profit here. Against all odds, the Redmond, Washington-based company continues to claim that virtually all its earnings are in foreign countries. Microsoft’s latest annual report, released earlier this week, shows that over the past two years, the company enjoyed worldwide income of almost $43 billion. It claims to have earned just 0.3 percent of that—$128 million—in the United States.