Brian Mark Weber asks an important question about corporations paying no taxes:
Some billion-dollar giants are paying $0, while small businesses pay out the nose.
The Tax Cuts and Jobs Act of 2017 was supposed to restore a sense of fairness and simplicity to the tax system for both individuals and companies. Sure, many working Americans had less taxes taken out of their paychecks in 2018, and there are other aspects of the act that improved the tax code overall, but the act failed to address tax loopholes that enabled the largest companies to avoid taxes. In fact, some of these loopholes were expanded.
For example, in 2018 there were 60 American corporations that paid $0 in federal taxes, despite earnings in the billions. According to a report from the Institute on Taxation and Economic Policy, these federal free riders included IBM, Amazon, Netflix, Molson Coors, Whirlpool, JetBlue Airways, and General Motors.
It gets worse.
As Megan Henney writes at Fox Business, “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.” Henney adds, “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.“
How do they get away with it?
The loopholes that these large companies use to reduce or eliminate their tax burdens include accelerated depreciation — which allows them to write off their capital investments — and a range of tax credits for what they call “research and development.” Still others took advantage of alternative-energy tax subsidies or stock options.
Until Congress and the Securities and Exchange Commission get serious about closing some of these loopholes, corporations will continue to take advantage. After all, what they’re doing isn’t illegal. But in the end, the public’s confidence in our elected officials will continue to erode as the perception of government favoritism toward big business is reinforced. Not surprisingly, polls show that most Americans want these loopholes closed.
Read more: Patriot Post
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