For 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.
The 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.
Earlier this week, Matthew Gardner of the Institute on Taxation and Economic Policy reported that Amazon, which recorded $5.6 billion in profits in 2017, paid zero in federal taxes, thanks to “various…
When President Trump released the initial outline of his tax reform plan in April, carried interest repeal was nowhere to be found. And when Congress hammered out a tax plan in late December, lawmakers agreed to reduce the cost of the carried interest tax provision by about 5 percent. (Full repeal would have raised $20 billion over a decade; the enacted provision raises about $1 billion.)
The president’s budget proposal would cut the agency’s baseline funding from $12 billion to $11.1 billion this year. This is almost a quarter less, in inflation-adjusted terms, than the $14.4 billion the agency received in fiscal year 2010. Not surprisingly, the long, steady decline of IRS funding during this period has led to a reduction in staffing: the agency’s 2016 employee total of 77,000 was 17,000 lower than at the beginning of the decade.
The 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.
The president released his budget Monday for fiscal 2019, proposing $11.1 billion for the Internal Revenue Service, including $2.3 billion for tax filing and compliance applications and $110 million to…
In 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.
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.
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.
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.
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.
If President Trump is indeed a deal maker, then he should dismantle Congress’s decision to rely on private debt collectors as a substitute for the Internal Revenue Service. This decision, championed for years by Sens. Charles Grassley, R-Iowa, and Chuck Schumer, D-New York, is a lousy deal for everyone–American taxpayers, the federal government–except private debt collectors.
The $1.5 trillion tax cut that took effect on Jan.1 was never really going to be about small businesses, despite President Trump’s transparently false claims to the contrary. However, one economic sector still appears happy, for now, to hoist a mug to Congress’s successful sleight of hand: craft breweries.
Taxpayers are still learning about the intended and unintended consequences of the major tax overhaul that Republican leaders ramrodded through late last year. One little-noted provision subverts state laws that…
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.
Since the Senate passed its initial tax overhaul, 32 companies have announced share buybacks totaling $83.7 billion, Schumer’s office said. Matthew Gardner, a senior fellow at the liberal Institute on…
Corker, who is already under federal investigation for alleged insider trading involving a real-estate firm, spent the weekend making a series of less-than-convincing statements justifying his switch. He first told…
Many Republicans who had previously claimed to be deficit hawks have been cheerfully supportive of major tax-cutting legislation as it has moved forward this fall. But one Republican Senator, Bob Corker of Tennessee, has taken a defiant stance on the issue, insisting that “passing off increased debt to future generations” would be a deal-breaker for him. When the Senate passed its version of the tax plan last week, Corker was the only Republican to vote No.
The Tax Cuts and Jobs Act, which was introduced on Nov. 2 in the House of Representatives, would raise taxes on some Americans and cut taxes on others while also providing significant savings to foreign investors.
So, who’s right? “They are both correct,” said Matt Gardner, senior fellow at the Institute on Taxation and Economic Policy. “They’re just measuring different things.” Tax breaks, financial reporting rules…
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.