Roughly 60 profitable S&P 500 companies paid zero federal income dollars in taxes in 2018. The corporations were profitable, more than likely had highly paid CEOs and executives working there, yet still paid zero dollars. Even Delta Airlines, General Motors, and Amazon, which had a net income of over 10 billion dollars last year, paid no taxes in 2018 according to a study from ITEP.
This means that those S&P 500 companies, which are some of the largest in the world, did not pay a cent towards our military, education (at the federal program level), social security or Medicare for retirees, infrastructure, public assistance programs and any other federal government program. It is quite incredible when you think about this….that all these companies are making tens of billions of dollars in income but paying no taxes.
Taxes – companies vs. individual
As we wrote about, over 40% of Americans do not pay income taxes. The vast majority of income taxes are paid by the top 1 to 10% of Americans by income. Now not only are 40%+ of individuals not paying federal income taxes, but many profitable companies are not paying taxes.
The data shows that the tax code is “skewed” again middle to high income Americans, whether they own their own business, work for a company, or have other sources of income. They pay high tax rates and a ton of money.
A number of independent studies show that the extremely wealthy (primarily people with hundreds of millions of dollars or more including billionaires) get advantages. While the gross amount they may pay for taxes is high, their income tax rate is very low due to the way they get to treat capital gains and other factors. Even one of the richest people in the world, Warren Buffett, says he has a lower tax bracket than his administrative assistant.
Now low to middle-low income families (over 40% of all Americans) pay no taxes either. They often get special credits, deductions, earned income credits, and other tax breaks that reduces their obligation to zero.
As this latest study shows, dozens of profitable S&P 500 companies paid zero taxes in 2018 too. This includes major corporations and “household names”, including Delta, Amazon, Avis, General Motors, Chevron, Whirlpool, Netflix, and others. They are profitable but have a zero tax commitment. They benefit from countless tax breaks, international ways they can book revenue, tax shelters, and many other advantages.
The Tax code is broken
Amazon has tens of thousands of their own or partner trucks driving on our streets or highways. Their planes use our airports. They benefit (like all Americans and companies) from having a safe and secure country that our military (and other law enforcement) provides. Yet Amazon pays zero…zero dollars for all of that. As do many other companies.
It is wrong. The tax code is so messed up. Small to mid size business owners pay taxes…heck I apparently paid much more than Amazon! We do not get those tax breaks. But tens of millions of people paid zero dollars in 2018 taxes as did S&P 500 companies.
Everyone should need to pay some federal government income taxes. Whether it is a very low income family…make them pay even a few bucks so they have “skin” in the game. Corporations should need to pay too. I think no one should pay zero dollars. It should be part of being an American and benefiting from all the services and advantages we have here…pay something in taxes. What do you think?