New York (AP) — Reports from Washington policy groups are making big pre-tax profits, as President Joe Biden is pushing for tax increases to businesses to help pay for infrastructure plans. Nevertheless, it emphasizes the number of companies that pay zero.
According to the Institute on Taxation and Economic Policy, more than 50 of the largest US companies paid no federal income tax last year and reported a group of about $ 40.5 billion in pre-tax profit, but many rebates. Was paid. The group believes that the tax system needs to raise more tax revenues.
55 companies nominated by Report Published on Friday, it spans many industries, from agriculture to tech, and includes well-known companies such as Nike and Duke Energy. According to the report, the two companies took advantage of President Donald Trump’s 2017 tax review and a break maintained or extended under the economic bailout package passed by Washington last spring.
With the 2017 tax cut, the rate of return is 21%. However, companies can use many tools to avoid taxes, such as canceling costs associated with stock options given to CEOs and other executives.
Companies can also use the set of tax credits available by making the investments that the US government is trying to encourage. This is similar to how individuals get tax credits to save on retirement funds and increase the energy efficiency of their homes.
At Duke Energy, one of the country’s largest utility owners, the company recorded a $ 110 million tax credit last year for producing renewable energy through wind farms. Based in Charlotte, North Carolina, the company helped earn a $ 281 million rebate on federal income tax last year after reporting US pre-tax profit of $ 626 million from continuing operations. I did.
“The legislators have developed these tax systems to encourage corporate taxpayers to invest in economic growth, infrastructure and renewable energy,” said Duke spokeswoman Catherine Butler.
She said federal tax rules could delay Duke’s cash payments of future taxes, but they could not rule out them. The company had about $ 9 billion in deferred tax liabilities as of the end of 2020, butler said it would be a future tax payment.
Meanwhile, Nike used a federal tax credit aimed at facilitating corporate research and development. The athletic apparel giant also received tax incentives related to stock-based compensation for the fiscal year ending May 31. After reporting an annual total pre-tax profit of $ 2.9 billion, we received a federal tax refund of $ 109 million.
Nike officials based in Beaverton, Oregon were unable to contact immediately for comment.
“Most CEOs of large public trading companies aren’t going to endanger prisons to get out of paying taxes when Congress offers them so many legal ways to do so. “” Said Steve Wamhoff, director of federal tax policy at the Taxation Institute. Economic policy.
The $ 2.2 trillion bailout package that Washington approved last spring to relieve the pain caused by the pandemic paved the way for businesses to limit federal tax bills. The law allowed companies to take the losses reported from 2018 to 2020 and use them to reduce their tax obligations from previous years, even if their income is taxed at a higher tax rate. ..
“When President Trump announced his intention to cut corporate taxes in 2017, he and Congress removed many loopholes that have allowed businesses to avoid taxing much of their income since the early 1980s. I had the opportunity, “writes the report’s authors, Wamhoff and Matthew Gardner. “But now, three-year data on effective tax rates paid by listed companies have been released, and it’s clear that the Trump Act hasn’t significantly reduced or even encouraged corporate tax avoidance. is.”
Companies paid a total of approximately $ 243 billion in tax revenues in 2019, down 30% from five years ago.
One-third of companies with more than $ 1 billion in assets paid zero federal income tax between 2013 and 2017, according to a report produced last year by members of the House’s Joint Committee on Taxation. For small businesses with assets of less than $ 1 billion, two of the three will have zero federal income tax debt in a particular year.
In 2019, corporate tax accounted for 3.9% of total US tax revenue, according to the Tax Foundation, a group that wants tax policies that lead to greater economic growth. This is compared to the Organization for Economic Co-operation and Development’s average of 9.6% of the total economy.
That number could go up if Biden could push forward with the corporate tax changes he proposed to help him pay. A $ 2.3 trillion plan to renew the country’s infrastructure.
Proposals to raise the corporate tax rate to 28% may not make a big difference for companies that use tax credits and other tools to avoid paying taxes. However, Biden’s plan to set a minimum tax of 15% on income that companies report to investors is called book income, and in some ways it is possible for some zero-tax companies to start paying. There is sex.
Republicans in Congress have already resisted raising corporate taxes, saying they will hurt the US economy.
Sweet reported from Charlotte, North Carolina.