GOP works to preserve tax cut that has delivered $67 billion to top corporations

Congressional Republicans are working to extend tax breaks that have allowed dozens of major U.S. corporations—including Amazon, Google, and Verizon—to collectively save $67 billion since they were expanded in 2018, according to an analysis published late last week.

The Institute on Taxation and Economic Policy (ITEP) found that the Trump-GOP tax law's "bonus depreciation" provisions, which allow companies to write off the full cost of equipment the same year it's purchased rather than over time, helped 25 major U.S. companies pay "an effective federal corporate tax rate of just 12.2% since 2018—far below the statutory rate of 21%."

"Some corporations have used accelerated depreciation to drive their effective tax rates down to single digits," noted ITEP's Steve Wamhoff, Matthew Gardner, and Spandan Marasini. "These include Verizon, Amazon, Walt Disney, Con Edison, General Motors, Dish Network, and others."

Amazon received a total of $8.4 billion in federal income tax breaks between 2018 and 2022—and 77% of that total was owed to accelerated depreciation, according to ITEP. For Intel and Facebook, 100% of their federal income tax breaks came thanks to accelerated depreciation.

The ITEP analysis stressed that it "would be a mistake to view accelerated depreciation as affecting only the timing of tax payments, as if the same amount of tax revenue will eventually be collected regardless of what tax depreciation rules are in effect."

"First, some corporations can use depreciation breaks each year, year after year, so they could avoid federal income tax for decades," the group explained. "Second, a tax payment deferred is a tax payment that is partly avoided through the effects of inflation. For example, if a company owes $10,000 in income taxes in 2022 but can delay paying most of it until 2030, the tax due in 2030 is effectively smaller because $10,000 will be worth less in 2030 than it is worth today. The federal government will effectively receive less. This is especially true in an environment with high inflation."

The depreciation provisions have begun phasing out this year, but Republicans are working to salvage the corporate handouts as part of a broader three-bill package that would predominantly benefit the richest Americans. The Republican-controlled House Ways and Means Committee approved the bills last month.

Belying the GOP's insistence that the primary purpose of its bills is to provide relief to "working families," the tax package would hand the wealthiest 1% of Americans an estimated $28.4 billion next year alone, according to a recent ITEP analysis.

By contrast, ITEP estimates that the poorest fifth of Americans would receive roughly $1.4 billion in tax cuts in 2024.

House Republicans' latest tax cut push, launched shortly after they held the global economy hostage in an effort to secure steep spending cuts and gash safety net programs, "should tell you where their priorities lie," the Patriotic Millionaires wrote on Twitter Sunday.