Trump’s tax cuts make Netflix, Nike, General Motors and more rejoice

3 March 20242 months ago babelfish

Thanks to a Trump law, many large American companies – Netflix, General Motors, Nike and more – have paid little tax, despite their rich profits. What the study by the Institute on Taxation and Economic Policy says

Thanks to a law by former President Donald Trump , some of the largest US companies have been able to pay significantly less taxes in recent years. In fact, the Tax Cuts and Jobs Act of 2017, worth $1.9 trillion, lowered the federal corporate income tax rate from 35 to 21 percent.

WHAT THE ITEP STUDY SAYS

The Institute on Taxation and Economic Policy conducted a study on 342 most valuable US companies to calculate how much they paid in taxes between 2018 and 2022, i.e. the first five years after the law came into force. Overall, these companies paid an average effective tax rate of 14.1 percent: despite takings of $3.99 trillion, they paid only $562.2 billion in federal taxes.

THOSE WHO PAID LITTLE…

Of the total, eighty-seven companies paid single-digit effective tax rates; for fifty-five of these, the rate was less than 5 percent. The latter group includes large companies such as Netflix, Nike, General Motors, AT&T, Salesforce, Bank of America and Citigroup.

For example, Netflix's effective tax rate during the period was 4.9 percent, and the company paid $954 million in federal taxes on $19.4 billion in profit. Between 2018 and 2022, Bank of America reported $138.9 billion in profits and paid $5.3 billion in taxes, with an effective rate of 3.8 percent.

… AND WHO PRACTICALLY NOTHING

A group of twenty-three companies managed to pay even less: for example, T-Mobile US (mobile telephony), Office Depot (office supplies), and Xcel Energy (electricity and gas distribution) paid no income tax taxes between 2018 and 2022, despite having generated profits each of those years.

According to the Institute on Taxation and Economic Policy report, “tax avoidance occurs because Congress chooses to allow it, either by enacting special exceptions and breaks from normal tax rules or by leaving loopholes in place that are clearly being exploited.” In fact, none of the US companies that paid little in federal taxes broke the law.

TAXES ON THE AVERAGE AMERICAN

For comparison – writes Quartz -, the average American worker saw an average tax rate of 24.8 percent applied in 2022.

WHAT WILL BIDEN DO?

The current American president Joe Biden has said he intends to raise the tax rate for companies to 28 percent and to increase taxes on the wealthiest citizens to raise resources to be used to reduce the state deficit. However, the Republicans – who control the House of Congress – would like to extend the tax cuts, or even make them permanent. The law offering tax breaks to individuals will expire at the end of 2025.

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/trump-tagli-tasse-aziende-stati-uniti/ on Sun, 03 Mar 2024 07:10:42 +0000.