Thirty-four percent of large, profitable corporations paid nothing in federal income taxes in 2018, the first year that the Trump tax cuts went into effect, according to a new study prepared for Sen. Bernie Sanders (I-Vt.) by the Government Accountability Office (GAO). The GAO also found that, on average, large, profitable American corporations paid less than 9 percent of their profits in federal income taxes in 2018.
“While House Republicans want to make huge cuts to Social Security, Medicare and Medicaid because of their ‘serious concern’ about the deficit, they voted to provide over a trillion dollars in tax breaks to large corporations and the top one percent,” Sanders said. “The situation has become so absurd that over a third of the largest and most profitable corporations in our country pay nothing in federal income taxes. Instead of cutting vital and popular programs like Social Security and Medicare, we need to repeal the Trump tax breaks for the rich and demand that the largest corporations in America finally start paying their fair share of taxes.”
While the GAO report does not identify individual companies, a report from the Center for American Progress last year found that AT&T made $29.6 billion in 2021, but paid nothing in federal income taxes that year. Instead, AT&T got a $1.2 billion refund from the IRS. Similarly, the Institute on Taxation and Economic Policy identified 55 profitable Fortune 500 companies.
The latest GAO report is one of the first comprehensive studies showing the enormous windfall that the Trump tax cuts gave to large corporations. The report finds the average tax rate for companies in 2017 was 14.6 percent, which dropped to just 8.9 percent in 2018.
This report follows a 2016 GAO report requested by Sanders that found profitable American corporations paid just 14 percent of their profits in federal income taxes on average from 2008 through 2012, and about one-fifth of them paid nothing at all each year.
In 2021, Sanders and Rep. Jan Schakowsky (D-Ill.) introduced the Corporate Tax Dodging Prevention Act that would have restored the pre-Trump corporate tax rate of 35 percent and comprehensively shut down offshore corporate tax avoidance. The provisions in this bill to close offshore loopholes alone could raise over $1 trillion in revenue from multinational companies over the next decade.
To read the report, click here.
