A total of 91 of the largest companies in the United States paid zero dollars in federal income taxes in 2018 under the tax law passed by Donald Trump and his Republican allies in Congress.
A new analysis released by the Institute on Taxation and Economic Policy (ITEP) on Monday found that Fortune 500 companies were able to avoid at least $73.9 billion in taxes under the first year of the Tax Cuts and Jobs Act.
ITEP’s analysis found that companies like Amazon, Chevron, Halliburton, and IBM, who do billions of dollars in sales, paid no federal income taxes. They also found that 56 companies paid an effective tax rate between 0 percent and 5 percent.
“Proponents of the law claimed it would boost federal corporate tax revenue, but that is nearly impossible since the law not only reduced the corporate tax rate, it also left some of the most egregious loopholes intact,” said Matthew Gardner, lead author of the study, in a release. “The 2017 tax law was a clear giveaway to corporations and their shareholders.”
Gardner noted that the tax law “weakened the nation’s ability to adequately fund critical priorities” just as top Republican leaders like Senate Majority Mitch McConnell have begun pushing for cuts to vital programs like Social Security.
The law was designed by Republicans as a massive giveaway to the ultra-wealthy, with tax breaks heavily tilted towards rich individuals and large corporations.
When they had control of the House and Senate in 2017, Republicans drafted the legislation in secret behind closed doors, bringing in lobbyists to load up the legislation with favors for major GOP donors like the conservative Koch brothers.
The highly unpopular legislation was supported only by Republicans, with only one member of their party voting against it in the Senate.
Defending the legislation after it passed, then-Speaker Paul Ryan touted the story of a secretary at a public high school who was “pleasantly surprised her pay went up $1.50 a week.” After he was mocked for the claim, Ryan deleted his tweet.
Republicans claimed that middle class voters would receive the benefits of the new law, but as its effects rippled through the system, those claims have repeatedly turned out to be false. Instead, corporations received massive tax cuts and only passed about 6 percent of their savings on to their workers.
The law has also incentivized companies to move American jobs offshore despite campaign promises from Trump that he would keep jobs in the United States.
The law has never been popular and public perception of it has worsened over time. A poll taken in April by Monmouth University found that only 34 percent approved of the law, a decline of 7 points from 2018.
Published with permission of The American Independent Foundation.