"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," Bernie Sanders said in a statement Friday. "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."
The Tax Cuts and Jobs Act, which former President Donald Trump signed into law in December 2017, slashed the corporate tax rate from 35% to 21% and authorized a slew of other giveaways that made it easier for large businesses and wealthy individuals to lower their tax bills.
A study released Friday by the Government Accountability Office found that "average effective tax rates—the percentage of income paid after tax breaks—among profitable large corporations fell from 16% in 2014 to 9% in 2018."
According to the GAO, the share of profitable large corporations that owed $0 in federal income taxes after credits rose from around 22% in 2014 to 34% in 2018.
"Each year from 2014-2018, about half of large corporations and a quarter of profitable ones didn't owe federal taxes," the GAO noted. "For example, profitable corporations may not owe taxes due to prior years' losses."
Another separate analyses from outside organizations such as the Institute on Taxation and Economic Policy (ITEP) have identified such corporations. In 2021, ITEP found that at least 55 large U.S. corporations including Nike, FedEx, HP, and Kinder Morgan paid $0 in federal taxes on 2020 profits.
Steve Wamhoff, ITEP's federal policy director, wrote in a blog post on Friday that the GAO's new study confirms that "the Tax Cuts and Jobs Act was an unprecedented gift to corporations."
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