House Democrats have just proposed that the corporate tax rate rises to 26.5% from the current 21.0%. The current rate was set by legislation passed under President Trump. The higher rates are meant to help cover the costs of the new $3 trillion-plus spending package triggered by plans of the Biden administration.
Corporate taxes paid by America’s largest companies are complex. Taxes for businesses that operate overseas are often paid at lower rates in those countries. Numerous efforts have been made, some successfully, to tax those profits in the United States. However, some large companies pay no taxes at all. They may operate at a loss, or they have deductions that keep them from having to make any annual payments.
On the other hand, some of America’s largest and most profitable companies pay taxes at a rate well above those stipulated by law.
Wallet Hub has just released its Corporate Tax Rate Report. The study looks at federal, state and international taxes paid by the S&P 500 companies. The overall tax rate for these companies is 20%. However, the authors point out:
Nine S&P 100 companies, Wells Fargo & Co, Salesforce.com Inc., AbbVie Inc., Duke Energy Corp., Adobe Inc., Broadcom Inc., International Business Machines Corp., Medtronic Inc and General Electric Co., are actually paying a negative overall tax rate and are therefore due a discrete net tax benefit.
The company that paid the highest tax rate (94.67%) was Gilead Sciences, one of the largest biotech pharmaceutical companies in the world. In the most recent quarter, its revenue was $6.2 billion, up 21% year over year. Earnings for the period were $1.21 per share compared to a loss in the same period a year ago of $2.66. Daniel O’Day, its board chair and chief executive, gave a partial reason for the success when the numbers were released:
We maintained our positive momentum in the second quarter, with both a solid financial performance and strong progress across our increasingly diverse portfolio. Our flagship HIV therapy, Biktarvy, saw continued growth and gains in market share, despite the ongoing impact of the pandemic.
Here are the 10 American companies that paid the highest taxes and their overall tax rates:
- Gilead Sciences (94.67%)
- Booking (89.59%)
- Kraft Heinz (64.95%)
- Walgreen Boots Alliance (48.45%)
- Dow (37.52%)
- Mondelez International (36.18%)
- Altria (35.36%)
- Walmart (33.35%)
- United Parcel Service (27.17%)
- American Express (27.03%)
Click here to read about America’s biggest companies from 1955 to 2010.
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