Corporate Tax Watch

blog July 18, 2017
FedEx Pays Just 7.5% of Its Profits in Taxes While Pushing for a Lower Corporate Tax Rate

The latest annual financial report released by shipping giant FedEx is yet another reminder that where you stand often depends on where you sit.

The report shows that last year FedEx paid a 7.5 percent federal income tax rate on nearly $3.6 billion of U.S. pretax income and this low rate is due in part to accelerated depreciation, a provision in the tax code that allows the company to write off capital investments faster than they wear out. It’s not surprising, then, that FedEx’s leadership is currently promoting a tax plan that would drop the company’s statutory tax rate even more, and allow it to write off capital investments even faster.
blog June 23, 2017
Inverter Mylan Finds Yet Another Way to Avoid Taxes

Rather than being known for its pioneering pharmaceuticals, Mylan is increasingly becoming infamous for its pioneering tax avoidance strategies. In 2015, Mylan used an inversion to claim that it is now based in the Netherlands for tax purposes. It is a Dutch company only on paper because ownership of the company was mostly unchanged and it continues to operate largely out of the United States. This maneuver has allowed the company to avoid millions in taxes on its earnings in the U.S. and abroad.

But that’s not the end of Mylan’s innovation when it comes to tax planning. A new report by Reuters found that Mylan is using a surprising new technique for dodging taxes: investing in coal refineries.
news release June 20, 2017
Speaker Ryan’s “Bold Agenda” for the Country Boils Down to Tax Breaks for the Wealthy

Speaker Paul Ryan today correctly outlined some of working people’s concerns, including the desire for more good jobs and access to the training required to secure those jobs. But his bottom line policy prescriptions for addressing the concerns of working people are the same old trickle-down economic policies that time after time have proven to primarily benefit the wealthy.
blog May 25, 2017
Congressional Hearing Highlights Problems with the Border Adjustment Tax

The debate over the so-called border adjustment tax (or BAT) took center stage this week when the House Ways and Means Committee held its first hearing on the topic. Despite strong support by the House Republican leadership and the Chairman of the Ways and Means Committee, Rep. Kevin Brady, the proposal faced an onslaught of criticism during the hearing from invited witnesses and members of both parties.
blog May 18, 2017
Tax Avoiding Companies Well Represented at Tax Reform Hearing

Today the House Ways and Means Committee will hold its first tax reform hearing of 2017, which marks the official opening of the tax reform debate in Congress. True tax reform, if the committee sought to achieve it, could create more jobs and ensure companies are paying their fair share by cracking down on the massive offshore tax avoidance that companies engage in. Unfortunately, the panel of witnesses for today’s hearing is largely made up of representatives of various major corporations that are beneficiaries of the loopholes in our current corporate tax laws. Given this, it seems likely that these panelists will not push for a fairer corporate tax code, but rather a code that allows them to avoid even more taxes and incentivizes moving more jobs offshore.
report April 27, 2017
3 Percent and Dropping: State Corporate Tax Avoidance in the Fortune 500, 2008 to 2015

The trend is clear: states are experiencing a rapid decline in state corporate income tax revenue. Despite rebounding and even booming bottom lines for many corporations, this downward trend has become increasingly apparent in recent years. Since our last analysis of these data, in 2014, the state effective corporate tax rate paid by profitable Fortune 500 corporations has declined, dropping from 3.1 percent to 2.9 percent of their U.S. profits. A number of factors are driving this decline, including: a race to the bottom by states providing significant “incentives” for specific companies to relocate or stay put; blatant manipulation of loopholes in state tax systems by corporate accountants; significant cuts in state corporate tax rates; and the erosion of state corporate tax bases, largely due to ill-advised state-level linkages to the federal system.
blog April 27, 2017
President Trump’s Corporate Tax Outline: At Least He Didn’t Use a Napkin

The most complimentary thing that can be said about the corporate tax changes outlined by President Trump earlier this week is that they weren’t scribbled on a napkin. Unlike supply-side…
blog April 27, 2017
New State Corporate Study: 3 Percent and Dropping

States are experiencing a rapid decline in state corporate income tax revenue, and the downward trend has become increasingly pronounced in recent years. Despite rebounding bottom lines for many corporations,…
blog April 25, 2017
Does a 15 Percent Corporate Tax Rate Sound Low? For Dozens of Major Corporations, Maybe Not

President Donald Trump has promised to release new details Wednesday on what he says could be “the biggest tax cut we’ve ever had.” While much is unclear about the shape…
report April 13, 2017
Fifteen (of Many) Reasons We Need Corporate Tax Reform

Profitable Fortune 500 companies in a range of economic sectors have been remarkably successful in manipulating the tax system to avoid paying even a dime in tax on billions of dollars in U.S. profits. This ITEP report examines a select, diverse group of 15 corporations’ tax situations to shed light on the widespread nature of corporate tax avoidance. As a group, these companies paid no federal income tax on $21 billion in profits in 2016, and they paid almost no federal income tax on $111 billion in profits over the past five years. All but one received federal tax rebates in 2016, and almost all paid exceedingly low rates over five years.
news release March 31, 2017
New Analysis Compares Tax Rates Paid by Companies Lobbying for/against Border Adjustment Tax

An Institute on Taxation and Economic Policy analysis finds that, on average, companies that are opposed to the Border Adjustment Tax pay higher tax rates than a coalition of companies…
blog March 30, 2017
A Comparative Analysis: Tax Rates Paid by Companies for and Against the Border Adjustment Tax

It’s often noted that corporate tax reform is difficult, in part, because it creates so many winners and losers. As Congress turns its attention to federal corporate tax reform, the…
blog March 9, 2017
Debunking the 35 Percent Corporate Tax Myth

For years, the number one tax policy talking point from corporate lobbyists has been the claim that the United States has the highest corporate tax rate in the world. The…
report March 9, 2017
The 35 Percent Corporate Tax Myth

Profitable corporations are subject to a 35 percent federal income tax rate on their U.S. profits. But many corporations pay far less, or nothing at all, because of the many tax loopholes and special breaks they enjoy. This report documents just how successful many Fortune 500 corporations have been at using loopholes and special breaks over the past eight years. As lawmakers look to reform the corporate tax code, this report shows that the focus of any overhaul should be on closing loopholes rather than on cutting tax rates.
blog February 22, 2017
The Border Adjustment Tax Creates More Problems Than It Solves

In recent weeks, the Republican congressional leadership’s effort to introduce a comprehensive tax reform bill has increasingly faced opposition from major business groups and skeptical lawmakers from across the aisle.…
report February 22, 2017
Regressive and Loophole-Ridden: Issues with the House GOP Border Adjustment Tax Proposal

In the summer of 2016, House Republicans released a blueprint for tax reform that is likely to be used as the starting point for major tax legislation in 2017.[1] One of the most radical provisions is a proposal to shift the corporate tax code from a residence-based to a destination-based system through applying a border adjustment on exports and imports. This proposal has major flaws that would make it a challenge to implement. Further, it is inherently regressive, rife with loopholes and would violate international agreements.
blog August 9, 2016
Tim Cook’s Disingenuous Argument to Justify Apple’s $215 Billion Offshore Cash Hoard

Tim Cook is a persuasive CEO. In a wide-ranging interview published earlier this week in the Washington Post, he discussed his vision for the company, thoughts about leadership succession, and…
report February 25, 2014
The Sorry State of Corporate Taxes

Many of America’s Most Profitable Corporations Pay Little or No Federal Income Taxes; Multinationals Pay Higher Rates Abroad Than in the U.S.
report November 13, 2011
Corporate Taxpayers & Corporate Tax Dodgers

Earlier this year, Berkshire Hathaway Chairman Warren Buffett made headlines by publicly decrying the stark inequity between his own effective federal tax rate (about 17 percent, by his estimate) and…
report April 15, 2010
Massey Pays One-Sixth of 35% Federal Tax Rate, Little in State Income Tax

A new analysis shows that Massey Energy, which owned the Upper Big Branch mine where 29 West Virginia miners were killed last week, paid an average of 5.6 percent of…
report September 15, 2004
Corporate Income Taxes in the Bush Years

This study details which companies have benefitted the most from the decline in corporate taxes over the past three years, and which have been less fortunate. It also measures the…