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Trump's tax cuts have saved Netflix, General Motors and other companies a lot of money

Trump's tax cuts have saved Netflix, General Motors and other companies a lot of money

Some of the largest and most profitable companies in the United States have dramatically reduced their tax bills in recent years thanks to tax cuts passed under then-President Donald Trump.

the $1.9 trillion The Tax Cuts and Jobs Act (TCJA) of 2017 – Supported by previous president And Former New York businessman Reducing the federal corporate income tax rate from 35% to 21%. Large corporations benefited from additional loopholes, according to the Institute on Taxation and Economic Policy (ITEP).

Institute Examined 342 of the most profitable companies In the United States and how much they paid in taxes between 2018 and 2022, the first five years after the bill became law.

When taken together, these companies pay an average effective tax rate of just 14.1%. For the $3.99 trillion they collected It paid just $562.29 billion in federal taxes.

Eighty-seven companies paid effective tax rates in the single digits or less; 55 of those companies had effective tax rates of less than 5%. This last group includes some of the largest companies: Netflix, Nike, General Motors, AT&T, Salesforce, Bank of America, and Citigroup.

For example, Netflix had an effective tax rate of 4.9% and paid $954 million in federal taxes, or a small portion of its $19.4 billion in profits over those five years. Bank of America reported profits of $138.9 billion and paid an effective tax rate of 3.8%, or $5.3 billion in taxes during the same period.

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But 23 companies were able to pay a smaller amount. T-Mobile US, Office Depot, and Xcel Energy paid zero — or less — federal income tax between 2018 and 2022, even as they made profits each year.

For comparison, the average American worker faced an average net tax rate of 24.8% In 2022, according to the Organization for Economic Cooperation and Development.

“Tax evasion occurs because Congress chose to allow it, either by enacting special exceptions and breaking normal tax rules or by leaving loopholes that are clearly being exploited,” the report says, after emphasizing that none of these companies violated anything. Laws.

The future of Trump's tax cuts is at stake in 2024.

President Joe Biden's stomach He supported increasing the corporate tax rate to 28%. And Increase taxes on the wealthy To reduce the national deficit, Republicans in Congress, who currently control the US House of Representatives, prefer to extend the tax cuts or make them permanent. The tax breaks provided by the legislation to individuals are scheduled to expire at the end of 2025.

“It creates An extraordinary political battle for 2025 “Something has to happen,” Howard Glickman, a senior fellow at the Urban Brookings Tax Policy Center, told Barron's last week.

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