America’s wealthiest citizens and corporations greatly benefit from tax policy that allows them to pay less in taxes than working class Americans. Sometimes, they are even rewarded with more money or other incentives.
Institute on Taxation and Economic Policy (ITEP) Executive Director Amy Hanauer joined America’s Work Force Union Podcast to discuss the companies who get away with paying no taxes, the laws that allow them to pay little to no taxes and more.
Hanauer introduced the ITEP as a group working to expose corporations and wealthy individuals who take advantage of the American tax system to the disadvantage of smaller earners. They also work to push policy that would close tax loopholes.
Companies who pay no taxes
Hanauer said there are plenty of companies who avoid paying their full share of taxes. However, the ITEP has identified at least 55 profitable fortune 500 companies who paid no taxes on their profits in 2020.
While she said they paid no taxes on their profits, they most likely did so legally. The current tax code allows companies to exploit plenty of loopholes to avoid paying taxes, and sometimes even gives them rebates.
Hanauer said the companies do this by moving their money overseas, where they pay a smaller tax rate or no tax rate at all. Additionally, they utilize accelerated depreciation of investments and offer different rates for stock options.
The Trump administration promised that the Tax Cuts and Jobs Act would eliminate many of these loopholes, but it did not. Instead, corporations enjoyed much lower tax rates and the same loopholes.
She added that the law was not necessary, as job growth during the three years before the tax cut was higher than in any year following the tax cut.