The 2017 tax law simply replaced one set of loophole-ridden rules that favored offshore profits over domestic profits with a new set of loophole-ridden rules doing the same thing. A bill introduced today by Rep. Lloyd Doggett and Sen. Sheldon Whitehouse would finally fix this to follow a simple principle: we should tax the offshore profits and domestic profits of our corporations the same way.
Corporate Tax Watch
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blog March 11, 2021 Rep. Doggett and Sen. Whitehouse Introduce Bill to Crack Down on Offshore Corporate Tax-Dodging
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blog February 26, 2021 How the Minimum Wage Is Becoming a Tax Issue for Congress
The federal minimum wage is almost comically low. At $7.25 an hour, it is 29 percent below its inflation-adjusted peak in the 1960s. Raising the minimum wage to $15 an hour would lift 900,000 Americans out of poverty. A solid 61 percent of voters support the idea. A majority of lawmakers in both the House and Senate support at least some version of a minimum wage hike. The popular $1.9 trillion American Rescue Plan includes a measure that would raise the minimum wage over the next few years to $15. So, what is the problem? And why are lawmakers now talking about using the tax code to mandate a higher minimum wage?
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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 4, 2021 Corporations Avoid Taxes in a Pandemic
The public and the Biden administration say corporations should contribute to the public infrastructure that lets them earn so much. We agree. It’s the least we can ask, in a pandemic and at all other times too.
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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 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 June 2, 2020 White House Incredibly Still Believes Tax Cuts Are the Answer to America’s Problems
White House officials continue to discuss tax cuts in response to the COVID-19 pandemic. Steve Wamhoff provides a roundup of these terrible ideas that would do little to boost investment or reach those who need it most.
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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 24, 2020 Partying Like It’s 2017: How Congress Went Overboard on Helping Businesses with Losses
The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides some needed relief for individuals and families, but two arcane tax provisions related to business losses will further enrich the wealthy and fail to boost our economy more broadly.
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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 February 12, 2020 Hearing Witness: Trump Administration Giving Tax Breaks Not Allowed by Law
The Treasury Department, tasked with issuing regulations to implement the hastily drafted Trump-GOP tax law, is concocting new tax breaks that are not provided in the law. This is the short version of what we learned while watching Tuesday’s House Ways and Means Committee hearing on “The Disappearing Corporate Income Tax.”
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blog February 11, 2020 Why Today’s Congressional Hearing on “The Disappearing Corporate Income Tax” Is Imperative
The United States is collecting a historically low level of tax revenue from corporations. In 2018, corporate tax revenue as a share of gross domestic product (the nation’s economic output)… -
blog February 10, 2020 President Trump’s 2021 Budget: Promises Made, Promises Broken
President Trump has kept only one of his promises–his pledge to lower taxes for corporations and their investors.
The budget plan he released today again breaks his promise to reject cuts in Medicaid that would affect millions of people. His budget once again fails to eliminate the deficit, much the less the national debt, during his presidency as he promised. It cuts trillions from safety net programs and student aid programs despite his pledge to stand for forgotten Americans.
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blog February 4, 2020 Trump Already Did Tax Cuts 2.0… For Corporations
If President Trump puts forth another tax proposal this year, as he is hinting, it will be his third. The second round, already costing the U.S. Treasury billions, was implemented largely out of the public’s view.
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blog January 31, 2020 From 0% to 1.2%: Amazon Lauds Its Minuscule Effective Federal Income Tax Rate
If we focus on the taxes the company paid in 2019, we see an effective federal income tax rate of just 1.2 percent. And since the company enjoyed federal income tax rebates in 2017 and 2018, this means that over the last three years Amazon has paid zero on $29 billion of U.S. pretax income.
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blog January 24, 2020 GOP Legacy on IRS Administration: Auditing Mississippi, not Microsoft
Money doesn’t buy happiness—but it can buy immunity from the reach of Uncle Sam. The IRS is outgunned in cases against corporate giants because that’s how Republican leaders want it to be. They have systematically assaulted the agency’s enforcement capacity through decades of funding cuts. Instead of saving money, these cuts have cost billions: each dollar spent on the IRS results in several dollars of tax revenue collected.