Over 50 public companies paid less than $0 federal income tax in 2020. Joe Raedle/Getty Images
Thanks to coronavirus relief packages and Trump-era tax cuts, 55 of the U.S.’s largest companies, including household names like Nike, FedEx and Salesforce, paid no federal income taxes in 2020 despite raking in billions of dollars in profits, according to a report published Friday by the Institute on Taxation and Economic Policy (ITEP).
The report looked at publicly traded companies included in the Fortune 500 or the S&P 500 index. Collectively, the 55 companies made over $40 billion in U.S. pretax income last year, per their financial statements. They would have paid a total of $8.5 billion for the year had they paid the 21 percent statutory federal corporate tax rate.
Not only did these companies pay zero income tax, many of them also scored generous tax rebates, resulting in steep negative effective tax rates. In an extreme example, Illinois-based food processing company Treehouse Foods paid no tax on $8 million of U.S. profits in 2020 while receiving $96 million in rebate. The company’s effective tax rate for the year was −1,167.1 percent.
Even more troubling, 26 of the 55 companies, including FedEx, Nike and Salesforce, didn’t pay any federal income tax for the past three consecutive years since the Republican tax bill took effect. Former President Donald Trump slashed the standard corporate tax rate from 35 percent to 21 percent.
The CARES Act also helped. The bill, passed last March, contained a “carry-back” provision that allowed businesses to use losses in 2020, 2019 and 2018 to offset profits earned in previous years, resulting in a rebate that reduced their 2020 taxes, according to the ITEP report.
“This means losses incurred in 2018, 2019, and 2020 can offset income taxed at the higher 35 percent tax rate in effect before 2018,” the institute explained. “Taxing profits at one rate while allowing losses to produce savings at a higher rate is an invitation for companies to play games, moving profits and losses around from one year to another on paper to reduce their tax bills.”
While the CARES Act was designed to help businesses and families weather the economic impact of the COVID-19 pandemic, many of the companies that benefitted from it actually saw their share prices and CEO pay soar in 2020 thanks to a booming stock market.
Notable companies paying $0 or less federal income tax in 2020:
FedEx
2020 U.S. Profit: $1.2 billion
Tax paid: $0
Tax Rebate: $230 million
2020 stock price change: +138%
2020 CEO pay: $11 million (30% down from 2019)
Nike
2020 U.S. Profit: $2.9 billion
Tax paid: $0
Tax Rebate: $109 million
2020 stock price change: +38%
2020 CEO pay: $53 million (up 278% from 2019)
Salesforce
2020 U.S. Profit: $2.63 billion
Tax paid: $0
Tax Rebate: $12 million
2020 stock price change: +33%
2020 CEO pay: $26 million (9% down from 2019)
HP
2020 U.S. Profit: $861 million
Tax paid: $0
Tax Rebate: $24 million
2020 stock price change: +22%
2020 CEO pay: $12.5 million (up 73% from 2019)
Michaels
2020 U.S. Profit: $322 million
Tax paid: $0
Tax Rebate: $11 million
2020 stock price change: +61%
2020 CEO pay: undisclosed ($12 million in 2019)
DTE Energy
2020 U.S. Profit: $1.5 billion
Tax paid: $0
Tax Rebate: $247 million
2020 stock price change: -6%
2020 CEO pay: $11 million (up 29% from 2019)
Article From & Read More ( 55 Massive Corporations Like Nike Paid $0 Federal Tax in 2020 While CEO Pay Soared - Observer )https://ift.tt/39VaZpt
Business
Bagikan Berita Ini
0 Response to "55 Massive Corporations Like Nike Paid $0 Federal Tax in 2020 While CEO Pay Soared - Observer"
Post a Comment