More than 50 public companies paid less than $ 0 federal income tax in 2020. Joe Raedle / Getty Images
Thanks to coronavirus relief packages and tax cuts in the Trump era, 55 of the largest companies in the US, including household names such as Nike, FedEx and Salesforce, will not pay any federal income tax in 2020, despite the introduction of billions of dollars in profits, according to ‘ a report published Friday by the Institute for Taxation and Economic Policy (ITEP).
The report looked at listed companies listed in the Fortune 500 or S&P 500 index. Together, the 55 companies earned more than $ 40 billion in U.S. revenue before tax last year, according to their financial statements. They would have paid a total of $ 8.5 billion for the year if they had paid the statutory federal tax rate of 21 percent.
Not only did these companies pay no income tax, but many of them also achieved generous tax rebates, which led to a strong negative tax rate. In an extreme example, food processing company Treehouse Foods in Illinois paid no tax on $ 8 million of U.S. profits in 2020, while receiving a $ 96 million rebate. The company’s effective tax rate for the year was -1,167.1 percent.
Even more worryingly, 26 of the 55 companies, including FedEx, Nike and Salesforce, have not paid any federal income tax for the past three consecutive years since the Republican tax bill came into effect. Former President Donald Trump has lowered the standard tax rate from 35 percent to 21 percent.
The CARES Act also helped. The bill, which was approved last March, contains a feedback provision that allows businesses to use losses in 2020, 2019 and 2018 to offset the profits earned in previous years, resulting in a rebate that reduces their taxes for 2020, according to the ITEP report. .
“This means losses incurred in 2018, 2019 and 2020 could tax the income at the higher tax rate of 35 per cent that was in effect before 2018,” the institute explained. “Taxing profits at one rate, while allowing for higher savings, is an invitation for companies to play games and shift profits and losses on paper to reduce tax bills.”
While the CARES Act is designed to help businesses and families cope with the economic impact of the COVID-19 pandemic, many of the companies benefiting from it have actually seen their share prices and CEO rise in 2020 thanks to a thriving stock market.
Well-known companies that will pay $ 0 or less federal income tax in 2020:
FedEx
US profit in 2020: $ 1.2 billion
Tax paid: $ 0
Tax rebate: $ 230 million
Share price change in 2020: + 138%
2020 CEO: $ 11 million (30% lower than 2019)
Nike
US profit in 2020: $ 2.9 billion
Tax paid: $ 0
Tax rebate: $ 109 million
Share price change in 2020: + 38%
2020 CEO pays: $ 53 million (278% higher than 2019)
Sales team
US profit in 2020: $ 2.63 billion
Tax paid: $ 0
Tax rebate: $ 12 million
Share price change in 2020: + 33%
2020 CEO pays: $ 26 million (9% lower than 2019)
HP
US profit in 2020: $ 861 million
Tax paid: $ 0
Tax rebate: $ 24 million
Share price change in 2020: + 22%
2020 CEO pays: $ 12.5 million (73% higher than 2019)
Michaels
US profit in 2020: $ 322 million
Tax paid: $ 0
Tax rebate: $ 11 million
Change in share price 2020: + 61%
2020 CEO pays: unknown ($ 12 million in 2019)
DTE Energy
US profit in 2020: $ 1.5 billion
Tax paid: $ 0
Tax rebate: $ 247 million
Share price change in 2020: -6%
2020 CEO: $ 11 million (up 29% from 2019)
