The Biden Administration is about to be locked in a battle with big business over corporate taxes. He wants to increase them to help fund his infrastructure bill, which has an estimated price tag of $1.9 trillion. One part of his plan would increase corporate taxes from 21% to 28%.
Among the first reactions across America’s biggest companies and their lobbying groups is that the money that would go to new taxes should go to investment in corporate expansion, which in turn drives jobs. To extend that argument, more jobs mean more personal tax income for the federal government. The big business argument is partly, “don’t tax us, tax the incomes of the people we will add in the future”.
Activists groups argue that a huge portion of corporate profits does not go to investment at all. Much of the money finds its way to dividends and share buybacks which improve the returns of investors. And, another piece of the profits goes to pay senior corporate managements tens of millions of dollars.
Some of America’s largest companies did not pay corporate federal taxes at all in 2020. The companies often say this is for good reason. They have lost money or invested all of their profits. Non-profit ITEP takes issue with that and offers a report each year. For this year, it is entitled “55 Corporations Paid $0 in Federal Taxes on 2020 Profits.” Among the points of the analysis is that the corporations on the list brought in $40.5 billion last year, so losses were not the issue driving whether these companies made federal income tax payments.
The ITEP says that there are specific reasons these 55 companies paid no taxes. “Their total corporate tax breaks for 2020, including $8.5 billion in tax avoidance and $3.5 billion in rebates, comes to $12 billion.” This makes the effective federal tax rate for these companies zero, or even negative. The counter-argument from many is that they pay huge payroll taxes, and often pay local taxes as well.
Some of America’s best-known companies are on this list. They include FedEx, Nike, Dish, and Charter Communications. The list is dominated by tech, financial services, and utilities.
No matter which side of the debate people are on, these 55 companies paid no federal corporate taxes last year.
Advanced Micro Devices Computers
Akamai Technologies Computers
American Electric Power Utilities
Archer Daniels Midland Food & beverages
Booz Allen Hamilton Computers
Charter Communications Telecommunications
CMS Energy Utilities
Community Health Sys Health care
Consolidated Edison Utilities
Dish Network Telecommunications
DTE Energy Utilities
Duke Energy Utilities
Hologic Health care
Howmet Aerospace Manufacturing
Interpublic Group Services
Jacobs Engineering Engineering
Kansas City Southern Transportation
Kinder Morgan Oil
Lincoln National Financial
Mohawk Industries Manufacturing
Owens & Minor Retail
Penske Automotive Motor vehicles
Qurate Retail Group Internet
Seaboard Food & beverages
Sealed Air Manufacturing
Telephone & Data Sys Telecommunications
Treehouse Foods Food, Beverages
Tutor Perini Engineering
Tyler Technologies Computers
UGI Utilities, Gas and electric
Unum Group Financial
Voya Financial Financial
Westlake Chemical Chemicals
Xcel Energy Utilities