The 2017 Republican tax cuts allowed 91 profitable Fortune 500 companies paid $0 in income taxes last year, according to a report from the Institute on Taxation and Economic Policy.
While those 91 companies managed to avoid income taxes altogether, all 379 Fortune 500 companies that turned a profit last year paid an effective tax rate of just 11%, half of the 21% corporate tax rate enshrined in the law.
“In 2018, the 379 companies earned $765 billion in pretax profits in the United States,” the report said. “Had all of those profits been reported to the IRS and taxed at the statutory 21% corporate tax rate, the 379 companies would have paid almost $161 billion in income taxes in 2018.”
The report said the companies paid just $86.8 billion, just over half of what they owed.
It’s all “entirely legal” thanks to Congress:
“A whole host of tax breaks in the code collectively have this pernicious effect,” Matthew Gardner, the lead author of the report, told Yahoo Finance, “this doesn’t exonerate these companies from wrongdoing.”
“What we are seeing is a product of the actions of Congress, aided and abetted by corporate lobbyists. This is the predictable consequence of creating tax breaks for any activity you can think of,” he said.
IRS revenues plummet after tax cut:
The Treasury Department collected $91 billion less in 2018 than it did in 2017, according to Yahoo, representing a 22% drop in revenue.
The 2018 number is the lowest amount collected from corporations in nearly a decade.
“We’ve never seen an effective tax rate as low as the one we just found,” Gardner told the outlet. “From that perspective, it seems like there’s never been a time in the modern era when companies have been so successful in avoiding corporate taxes.”