In a year when many U.S corporations enjoyed record-breaking profits, some of the wealthiest companies in the nation paid little-to-no taxes according to a new analysis—or even accepted tax refunds—while working Americans continued paying their normal tax rates and faced rising prices for essentials.
"These are some of the largest companies in the world, pulling in billions of profits; yet none will owe a cent in federal income taxes."
That's according to a Center for American Progress (CAP) analysis released Tuesday that found 19 Fortune 100 companies paid effective tax rates in the single digits, if they paid anything at all.
The highest-earning Fortune 100 company, JPMorgan Chase, reported pre-tax earnings of $48.2 billion in 2021, but paid less than 6% in federal taxes despite an official corporate tax rate of 21%.
Amazon.com, which earned $35.1 billion in the U.S. in 2021, paid only 6.1% in federal taxes—all while its growth in profits over the past two years outpaced the wages the company paid its 1.1 million U.S. workers and while the company spent more than $4 million on union-busting to fend off organizing efforts at its warehouses.
"Corporations are looting America," said former Labor Secretary Robert Reich in response to CAP's report.
As Reich noted, CAP's analysis showed that four Fortune 100 companies—AT&T, Charter Communications, American International Group (AIG), and Dow—will receive an income tax benefit, or refund, instead of paying taxes for 2021.
After earning $29.6 billion in 2021, AT&T reported a tax refund of $1.2 billion. Charter Communications reported a refund of $12 million after earning $6 billion, AIG will receive $216 million from the federal government despite $9.8 billion in earnings, and Dow will receive $46 million after earning $1.5 billion.
"These are some of the largest companies in the world, pulling in billions of profits; yet none will owe a cent in federal income taxes," wrote Ryan Koronowski, Jessica Vela, Zahir Rasheed, and Seth Hanlon at CAP. "As their investor filings show, many corporations pay a much lower actual—or 'effective'—rate on their profits because of the many ways they can reduce their taxable income under the current tax system. The low tax rates for these companies worsen an already unjust increase in inequality."
Of the Fortune 100 companies that actually paid taxes in CAP's analysis, UPS paid the highest tax rate at just 9.9%—still well below the tax rate established by President Donald Trump's so-called Tax Cuts and Jobs Act of 2017 (TCJA). General Motors paid the lowest tax rate, paying 0.2% in federal taxes on $9.4 billion in earnings.
"Policymakers must act now to ensure that large, profitable corporations pay their fair share."
Large companies outside the Fortune 100 also managed to avoid paying taxes despite earning billions in 2021, according to the report. Software company Salesforce earned $2.7 billion but effectively paid $0 in federal income taxes, Duke Energy paid effectively no taxes on $3.7 billion in U.S. earnings, and Netflix paid an effective tax rate of just 1.1% on 5.3 billion in earnings.
"Is anyone else tired of paying more in taxes than corporations making billions of dollars?" asked political advocacy group Progress Iowa.
CAP cited two other reports showing how the wealthiest U.S. companies are avoiding taxes despite soaring profits. The financial data company FactSet collected data showing that S&P 500 corporations' four most profitable quarters happened in 2021, while the Institute for Taxation and Economic Policy (ITEP) conducted an analysis "concluding that former President Donald Trump's TCJA allowed many companies to pay $0 in taxes."
The group noted that with control of the White House and both chambers of Congress, the Democratic Party could change the status quo and ensure wealthy corporations pay their fair share in taxes, as President Joe Biden tried to last year by proposing a 15% minimum corporate tax and measures to stop corporate tax dodging as part of the Build Back Better Act.
"Polls show that raising taxes on corporations is among the most popular elements of President Biden's economic agenda," said CAP. "Policymakers must act now to ensure that large, profitable corporations pay their fair share."