A significant number of large U.S. corporations pay little or no federal income taxes, despite reporting billions in profits. Recent analyses provide clear examples and broader trends:
- In 2023, major companies such as General Electric, General Motors, Meta (Facebook), Tesla, and T-Mobile paid extremely low effective tax rates-some even received refunds instead of paying taxes. For example, General Electric earned nearly $7 billion but got a $423 million refund; T-Mobile paid only 0.4% in federal taxes.
- A study found that in 2020, 55 of America’s largest companies paid no federal income taxes despite being profitable, and nearly half of them paid no U.S. income taxes for three consecutive years. Companies like Nike, FedEx, and Salesforce were among those.
- Another report identified 39 profitable corporations in the S&P 500 or Fortune 500 that paid no federal income tax from 2018 through 2020.
Collectively, these firms reported $122 billion in profits over those three years but paid zero or negative total federal income taxes, meaning some received net refunds.
- In 2021, 19 of the biggest American corporations paid little or no taxes, including Amazon, AT&T, Charter Communications, and AIG.
These outcomes are made possible by a combination of tax breaks, loopholes, deductions, and credits-such as accelerated depreciation, offshoring profits, and generous stock option deductions.
The effective tax rate for many large corporations is far below the statutory rate of 21%, with some paying rates in the single digits or less.
Dozens of the largest U.S. corporations pay little or no federal income taxes each year, with some avoiding taxes for multiple consecutive years despite substantial profits. This pattern is persistent and widespread among Fortune 500 and S&P 500 companies.
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Mainecat · Posted
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