Corporations are supposed to pay taxes at the official rate of 35 percent which President Trump wants to cut by 15 percent. But many major companies have already slashed their tax rates much more.
Call it “do it yourself” tax cuts – taking advantage of all the loopholes their lawyers, lobbyists and accountants can locate or create. In fact, 39% of 258 profitable Fortune 500 companies paid no corporate taxes at least once between 2008 and 2015.
In a recent study of 92 profitable corporations that were paying less than 20% in taxes, more than half of those companies cut their total work force by 483,000 jobs between 2008 and 2016. AT&T and Verizon cut 79,450 and 78,450 jobs, while enjoying 8.1% and 9.1% corporate tax rates. Meanwhile, the entire private sector increased its workforce by 6%.
Where did big businesses’ tax windfalls go?
AT&T’s CEO compensation soared 146%.
ExxonMobil paid a 13.6% US tax rate but shed one-third of its worldwide workforce. CEO Rex Tillerson pocketed a $27 million salary, plus a $180 million stock payout for becoming Secretary of State.
That’s why the Federal Reserve Board of Governors finds “little evidence that corporate tax cuts boost economic activity, unless implemented during recessions.”