Matthew Gardner
Matt Gardner is a senior fellow at ITEP where he has worked since 1998. He previously served as ITEP’s executive director from 2006 to 2016. Matt’s work focuses on federal, state and local tax systems, with a particular emphasis on the impact of tax policies on low- and moderate-income taxpayers. He uses ITEP’s microsimulation model to produce economic projections and analyses on the effects of current and proposed federal and state tax and budget policies.
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news release March 31, 2021 President Biden’s Infrastructure Plan Moves Toward Ending “Zero-Tax” Profitable Corporations
Following is a statement by Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy, regarding the corporate tax provisions in the “American Jobs Plan,” released by… -
blog March 19, 2021 Zoom Pays $0 in Federal Income Taxes on Pandemic Profits
Zoom Video Communications, the company providing a platform used by remote workers and school children across the country during the pandemic, saw its profits increase by more than 4,000 percent last year but paid no federal corporate income tax on those profits.
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blog February 12, 2021 CARES Act Helps Create $4.6 Billion Tax Cut for Health Care Companies Paying Opioid Settlements
Talk about a one-two punch. A new report from the Washington Post reveals that the U.S. public is set to pay for the opioid crisis again. Already, communities across the country have paid a heavy price via the devastating public health toll. Now, it appears taxpayers will be on the hook for billions in corporate tax breaks as four pharmaceutical companies exploit a loophole in the Trump-GOP tax law and a CARES Act tax provision meant for companies facing pandemic-related profit losses.
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blog February 3, 2021 Amazon Has Record-Breaking Profits in 2020, Avoids $2.3 Billion in Federal Income Taxes
Amazon’s winning streak in its battle against the U.S. tax system remains intact. This week the retail giant announced record-breaking sales and income for 2020, and an effective federal income tax rate of just 9.4 percent, less than half the statutory corporate tax of 21 percent. If Amazon had paid 21 percent of its profits in federal income tax, that would have come to $4.1 billion. The company’s reported current tax of $1.8 billion was less than half that, meaning last year Amazon avoided $2.3 billion in taxes.
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blog February 1, 2021 Pandemic Profits: Netflix Made Record Profits in 2020, Paid a Tax Rate of Less than 1 Percent
Netflix’s “current” federal income tax for 2020 was $24 million, which equals just 0.9 percent of the company’s pretax income for the year. This is another way of saying Netflix paid an effective federal income tax rate of just 0.9 percent in 2020. If the company paid the statutory rate, its tax bill would be $572 million.
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blog October 28, 2020 An Underfunded IRS Allows Corporations to Get Away with Probably Illegal Tax Dodges
A new look at S&P 500 annual financial reports for 2019 shows that five companies—Chevron, Dell, Eli Lilly, ExxonMobil and General Electric—kept $1 billion in tax breaks they admitted were probably illegal because tax authorities failed to come to a final determination before the statute of limitations ran out.
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blog September 30, 2020 Donald Trump and Taxes: Fast and Loose with Loopholes or Fraud?
The president’s apparent abuse of everything from hair-care deductions to consulting fees for family members raises questions about whether Trump was fast and loose with tax loopholes or whether the IRS simply wasn’t enforcing the law. Either way, Trump successfully flouting or pushing the limits of the law shouldn’t come as a surprise: Congress has cut IRS funding, in real terms in each of the last 10 years.
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blog August 5, 2020 Between the Lines: Amazon Q2 Report Hints It Will Avoid Taxes on This Year’s Record Profit Haul
The House Judiciary Committee last week held an antitrust hearing to scrutinize Amazon and other tech companies’ growing dominance. A look at the online retail giant’s new quarterly report and past tax avoidance reveals why lawmakers should be equally concerned about how the tax system allows dominant, profitable corporations to avoid most or all federal tax on their profits.
Amazon, yet again, is poised to pay little or no federal income tax on its record profits, and it appears likely to do so using entirely legal tax breaks for stock options and research and development.
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blog July 29, 2020 Biden’s Minimum Corporate Tax Proposal: Yes, Please Limit Amazon’s Tax Breaks
A large majority of Americans want corporations to pay more taxes and Democratic presidential candidate Joe Biden has several proposals to achieve that. The newest idea is to require corporations to pay a minimum tax equal to 15 percent of profits they report to shareholders and to the public if this is less than what they pay under regular corporate tax rules. A recent article in the Wall Street Journal quotes several critics of the proposal, but none of their points are convincing.
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blog July 28, 2020 A Tax Loophole You Could Drive a Food Truck Through: Senate GOP Proposes Full Deductibility of Business Meals
After weeks of being in no particular hurry to assemble a new COVID-19 economic relief package, the Senate GOP has released its plan. It includes the “Supporting America’s Restaurant Workers Act,” which would allow business owners to write off 100 percent of the cost of their restaurant meals through the end of 2020. The two most obvious questions to ask about such a plan are “why” and “why now?” Republican lawmakers have not offered sensible responses to either because they have none.
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report July 21, 2020 An Updated Analysis of a Potential Payroll Tax Holiday
ITEP estimates that if Congress and the president eliminated all Social Security and Medicare payroll taxes paid by employers and employees from Sept. 1 through the end of the year, 64 percent of the benefits would go the richest 20 percent of taxpayers and 24 percent of the benefits would go to the richest 1 percent of taxpayers, as illustrated in the table below. The total cost of this hypothetical proposal would be $336 billion.
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report July 14, 2020 Who Pays Taxes in America in 2020?
Having a sound understanding of who pays taxes and how much is a particularly relevant question now as the nation grapples with a health and economic crisis that is devastating lower-income families and requiring all levels of government to invest more in keeping individuals, families and communities afloat. This year, the share of all taxes paid by the richest 1 percent of Americans (24.3 percent) will be just a bit higher than the share of all income going to this group (20.9 percent). The share of all taxes paid by the poorest fifth of Americans (2 percent) will be just a bit lower than the share of all income going to this group (2.8 percent).
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report June 30, 2020 Republican Tax Credit Proposal Would Provide New Breaks to Tax Avoiders Like Amazon and Netflix
While lawmakers of both parties and policy experts discuss various ways to respond to the continuing COVID-19 crisis and resulting economic downturn, Republicans in Congress are offering a new solution. Their idea, which is still being discussed, is to waive existing limits on business tax credits. This could benefit corporations that are profitable but that nonetheless pay no taxes or very little in taxes because of the many tax breaks and legal loopholes they already enjoy.
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blog June 23, 2020 McSally “Travel Tax Credit” Is an Invitation for Tax Avoidance
Earlier this week, U.S. Sen. Martha McSally (R-AZ) introduced the “American TRIP Act,” a bill ostensibly designed to encourage Americans to boost the economy by traveling within the United States. The bill is certainly a trip in the colloquial sense of the word.
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report June 2, 2020 Depreciation Breaks Have Saved 20 Major Corporations $26.5 Billion Over Past Two Years
The Trump administration and its congressional allies have proposed making permanent the expensing provision in the Trump-GOP tax law. Expensing is the most extreme form of accelerated depreciation, which allows businesses to deduct the cost of purchasing equipment more quickly than it wears out. But expensing and other types of accelerated depreciation already account for a very large share of corporate tax breaks and allows many companies to pay nothing at all.
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blog June 2, 2020 Trump-GOP Tax Law Encourages Companies to Move Jobs Offshore–and New Tax Cuts Won’t Change That
New tax cuts to incentivize bringing jobs back to the United States will fail. No new tax provisions can be more generous than the zero percent rate the 2017 law provides for many offshore profits or the loopholes that allow corporations to shift profits to countries with minimal or no corporate income taxes.
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blog May 20, 2020 A Dimon Memo Will Buy You a Dime’s Worth of Social Change
JPMorgan Chase CEO Jamie Dimon, in a May 19 memo to employees, outlines steps the company is taking to help its customers, small businesses and communities stay afloat. The part… -
blog May 5, 2020 The Price We Pay for Amazon in Its Prime
There is every reason to believe that Amazon will continue its tax-avoidance ways in 2020. The entirely-legal tax avoidance tools the company used to zero out its federal income tax bills over the last three years remain entirely legal today. From accelerated depreciation to the research and development tax credit to the deduction for executive stock options, Amazon’s tax avoidance tools have been blessed by lawmakers, and presidents, of all stripes.
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blog April 29, 2020 Pandemic Profits: Netflix’s Record Profit Haul, Past Tax Avoidance Raise Questions about Tax Law’s Weaknesses
At a time when many companies are facing existential threats due to the COVID-19 pandemic and associated economic shutdown, it is vital to ensure that our corporate tax laws apply fairly to companies that are still turning a profit in these turbulent times.
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blog April 6, 2020 Trump to Restaurant Owners: “Let Them Eat Skyboxes”
Last week, President Trump destroyed everyone’s coronavirus press conference bingo card by announcing that a conversation he had with celebrity chef Wolfgang Puck inspired him to propose restoring a corporate tax deduction for business entertainment expenses. Trump’s own signature tax plan repealed this break two years ago.
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blog April 1, 2020 Boeing “CARES” A Lot About its Shareholders—But What about the Rest of Us?
The gigantic Coronavirus-related tax and spending bill enacted last week, the so-called “CARES Act,” sets aside $17 billion in loans for “businesses critical to maintaining national security.” It’s generally understood that the bill’s authors want much, if not all, of this $17 billion to go to a single company: Boeing. So it behooves us to ask whether Boeing benefits America and its economy in ways that merit this largesse.
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blog March 31, 2020 Congress “CARES” for Wealthy with COVID-19 Tax Policy Provisions
At a time when record numbers of Americans are facing unemployment, state and local governments are facing a perfect storm of growing public investment needs and vanishing tax revenues, and small business owners are struggling to avoid even more layoffs, lavishing tax breaks on the top 1 percent in this way shouldn’t be in anyone’s top 20 list of needed tax changes.
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blog March 10, 2020 COVID-19 Is No Excuse for Airline Industry or Any Other Corporate Tax Cut
Trump administration officials have reportedly floated the idea of including tax breaks for the airline industry in its package of COVID-19-related stimulus proposals, which would allow airline companies to defer income taxes into the future. This is an odd policy choice since most of the biggest airlines are already using deferral to zero out most or all of their federal income taxes on billions of dollars in profits.
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blog March 3, 2020 Administration Once Again Touts Misleading Information on 2017 Tax Law
The Trump administration has remained consistently on message about its 2017 Tax Cuts and Jobs Act. More than two years after the passage of the law, Treasury Secretary Steve Mnuchin… -
news release February 19, 2020 White House Advisors’ Push for Corporate ‘Minimum Tax’ Will Not Fix the Tax Law
A White House proposal to follow Trump’s massive corporate tax cuts with a minimum corporate tax would be like shooting a person on Fifth Avenue and then offering them a band aid.