New Tax Code Leaves Workers Paying Higher Tax Rate than Corporations
Tuesday, December 24, 2019
LANSING, Mich. - A new report says 91 of the nation's largest corporations didn't pay any federal income taxes in 2018, the first year of the Trump administration's new tax law. The study by the Institute on Taxation and Economic Policy says even though the corporate tax rate was lowered to 21%, legal loopholes allowed the corporations surveyed to pay, on average, just over 11% in taxes.
Report co-author Matthew Gardner, senior fellow at the institute, pointed out this kind of corporate tax avoidance is entirely within the law.
"There is no implication that any of this is illegal. By all accounts, these companies are simply using the legal tax breaks that they lobbied Congress to give them," Gardner said.
The companies that paid zero taxes include Amazon, Netflix and DowDupont of Midland, Michigan. Detroit-based General Motors also didn't contribute any taxes on more than $4 billion in profits. Supporters of the new Tax Code have argued that lowering corporate rates would lead to increased investments and higher wages.
But Gardner said most workers' wages have remained stagnant, and many corporations used the extra money saved on taxes to buy back stock instead of investing in their companies. He called the report's findings disturbing, especially for middle-class workers who now know they pay a much higher tax rate than many wealthy corporations.
"There is a problem of democratic distrust right now," he said. "People do not trust their government, they don't trust elected officials. And it's precisely this sort of finding that reinforces that distrust."
The authors suggest Congress should reinstate a strong corporate Alternative Minimum Tax to act as a backstop to ensure all profitable corporations pay a meaningful corporate income-tax bill each year.
get more stories like this via email
RICHMOND, Va. - Virginia's General Assembly Special Session begins today to budget more than $4 billion in federal COVID relief funds, and advocates …
ROSLINDALE, Mass. - A new report finds Massachusetts residents would rather repair electronic devices than send them to landfills, but manufacturers …
DENVER-During the COVID health emergency, the federal government made school meals available for free to all students, regardless of their financial …
HELENA, Mont. - COVID-19 is underscoring the importance of ensuring that people's estates are in order, but estate planning can be be tricky for …
ALBUQUERQUE, N.M. - Pandemic fallout still has U.S. states clawing their way back to normalcy, and New Mexico believes its decision to provide more …
CONCORD, N.H. - New polling finds many New Hampshire voters think it's important that wealthy individuals and corporations pay what's described as …
AMARILLO, Texas - The American Farm Bureau Federation hosts more than 100 college level chapters across 35 states, but this is the first time its …
ELIZABETH CITY, N.C. - As activists mark more than 100 days of protest since the April 21 death of Andrew Brown Junior - killed outside his Elizabeth …