Amazon, Netflix, General Motors, Chevron, JetBlue, IBM and U.S. Steel were all among the companies that avoided taxes last year using a diverse array of loopholes and tax breaks, according to a new report from the Institute on Taxation and Economic Policy, a nonpartisan think-tank.
The 2017 Tax Cuts and Jobs Act dropped the corporate tax rate to 21 percent from 35 percent, while also keeping intact most of the tax breaks that allow profitable companies to zero out what they owe.
“The result, unsurprisingly, has been a continued decline in our already-low corporate tax revenues: in fiscal 2018, U.S. corporate tax revenues fell by 31 percent, according to U.S. Treasury data,” the study said. “This was a more precipitous decline than in any year of normal economic growth in U.S. history.”
In total, the 60 companies paid no federal income tax on $79 billion in U.S. pretax income, according to the study. And instead of paying $16.4 billion in taxes at the 21 percent corporate rate, the companies received a corporate tax rebate of $4.3 billion.
Netflix, for instance, raked in $856 million in profit but paid no federal taxes because of tax credits, according to ITEP. IBM, meanwhile, earned $500 million but received a rebate worth $342 million, although it’s unclear specifically how the company did so. The company said it used “domestic incentives” to reduce its income tax by about $110 million in 2018.
According to the Joint Committee on Taxation, the tax law is set to save U.S. companies $1.4 trillion by 2027.
Bernie Sanders, a 2020 Democratic candidate and Vermont senator, slammed the corporations on Monday for not paying what he said is their fair share of taxes.
“I happen to believe … that we have an absurd tax system,” Sanders told Fox News’ Bret Baier of “Special Report” and Martha MacCallum of “The Story” during a townhall.
The tax law is likely to be front-and-center during the 2020 presidential election. Already, some Democratic candidates have proposed ambitious, multi-billion dollar policies to expand social programs which they hope to fund by rolling back the tax law.