The Institute on Taxation and Economic Policy examined 258 Fortune 500 companies that were profitable from 2008 to 2015 and found 100 companies paid zero — or less — in federal income taxes for at least one year. Some companies like PG&E (Pacific Gas and Electric Company) didn’t pay taxes at all. Plus, many received some form of a tax rebate from the U.S. Treasury, often totaling hundreds of millions of dollars.
Why do some companies not pay taxes at all? Study author, Matt Gardner told POLITICO it is because of how Congress has enacted tax breaks over the past 30 years.
“Lobbyists have said we need a tax break for this activity and almost without exception Congress has listened,” said Gardner. “At first, it was manufacturing, but other lobbyists have pushed for special tax breaks for research and big capital investment.”
The result, Gardner said, is we’ve created a piecemeal tax system that’s left certain industries in the cold, paying disproportionately more because they don’t qualify for existing tax breaks. It also allows companies that do qualify to reap more profits and pay less in taxes. Read more