More than 1 million hot glue guns recalled by Dollar Tree due to fire and burn risks
FTC tells day trading scheme to stop fooling consumers about big earnings

While everyday Americans are paying taxes, some corporations aren’t paying their fair share, watchdog group says

Stock-exchange-gf9ea10eac_640If you’re like me, you pay income taxes every year. However, some large corporations are evading taxes while raising prices.

Five large corporations – including FedEx, Nike, and Duke Energy, which raised prices on consumers last year – paid an average tax rate of negative 11.6 percent and owed a total of negative $636 million in federal income tax in 2020, according to Accountable.US, a watchdog organization. But, these same companies saw net incomes jump to at least $14.5 billion and spent over $27.6 billion on shareholder handouts in 2021. 

“How can any big corporation that has effectively paid nothing in taxes and reported massive new profits and generous shareholder rewards honestly say they had no choice but to raise prices so high on consumers?” asked Kyle Herrig, president of Accountable.US.

When corporate profits are at their highest levels in nearly 50 years, it’s time many CEOs admit they’re charging average families well beyond any new costs during the pandemic, Herrig said.

“Corporations can either play a role in the economic recovery – or hold it back by using the pandemic as an excuse to rip off families,” he said. “Highly profitable companies can start taking responsibility by stabilizing prices for consumers instead of padding their bottom line, on top of finally paying their fair share in taxes.”

Clear pandemic profiteering and corporate greed from the big oil, meat packing, shipping, trucking, and railroad companies are making inflation problems worse for everyday families, according to Accountable.US’s research.

Many CEOs have claimed they had no choice but to hike costs on consumers, while turning around to boast of rising profits to investors and rewarding their shareholders with stock buybacks and dividends, Herrig said. 

Key points from Accountable.US’s recent report, “Research on Profiteering Corporations That Paid No Taxes,” are:

FedEx

  • 2020: Paid minus $230 million in tax despite nearly $1.22 billion in profit.
  • “Secured secret deals” with Luxembourg, a “magical fairyland” for tax avoidance.
  • “Lobbied hard” for the 2017 Trump tax cuts, but didn’t increase investment in the year following the cuts.
  • 2021: Announced rate hikes and new surcharges on a number of deliveries.
  • Reported nearly $3.27 billion in net income in the first nine months of its FY 2022 and over $2.8 billion in shareholder handouts over the same period.

Nike

  • 2020: Paid minus $109 million in tax despite $2.87 billion in profit.
  • “Avoided paying $4 billion in U.S. Taxes” through schemes revealed in the “Paradise Papers.”
  • Touted the “strategic and financial” benefits of “full price realization” as it raised prices.
  • Reported an additional $389 million in net income in the first nine months of its FY 2022, as it spent nearly $4.28 billion on shareholder handouts.

Duke Energy

  • 2020: Paid minus $281 million in tax despite $826 million in profit.
  • Touted positive results in its FY 2021 from increased rates after working to increase its energy rates in multiple states.
  • Enjoyed a 230 percent increase in FY 2021 net income and projected over $3 billion in shareholder dividends in 2022.

Charter Communications Inc.

  • 2020: Paid minus $7 million in tax despite $3.68 billion in profit.
  • Has repeatedly raised rates on consumers. 
  • Saw FY 2021 net income soar by $1.4 billion to more than $4.6 billion while it boosted stock buybacks by $4.2 billion to over $15.4 billion.

PPL Corporation

  • 2020: Paid minus $9 million in tax despite $878 million in profit.
  • Planned to raise electricity rates by 26 percent for residential customers and 36.4 percent for commercial ones in late 2021. 
  • Spent nearly $1.3 billion on shareholder handouts in its FY 2021 and was poised to spend $5.3 billion on a major acquisition in early 2022.

Tax breaks allow corporations to earn a negative effective tax rate. That means they earned more in their after-tax income than in their pretax income, often due to tax rebates from the U.S. Treasury.

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

azure

Sadly, this is nothing new. Not since the first "tax form" of Rocket Ronnie's administration.
Neither Dems nor GOPers have the will or nous to revise the tax code so it's less favorable to corporations and the wealthy, i.e. less regressive. Without true/strict campaign finance reform I can't see that changing, just as I can't see any decrease in the erosion of consumer protection law--unless people think being forced into private law (mandatory arbitration) and agreeing not to participate in class actions is great for "consumers." Maybe if Congresswoman Warren had been nominated for prez and actually won, we might've seen some real changes w/regards to consumer protections. Maybe.
While campaigning, some of the Dems talk about tax reform but when they're elected, somehow it becomes "too extreme" to actually do because of course it's just too extreme to expect the wealthy & large corporations to pay their share, despite the many tax breaks they get (from states, from cities, etc).

Guess I'll join the Democratic socialist party, since if they ever elect enough people, they might actually try to achieve reform of the tax code.

Many years ago, Bush I said that he wanted the IRS to "crack down" on tax cheats, of course, he meant only middle & working class (and poor people) 'cheaters'. The then head of the IRS said, that most of the fraud/cheating wasn't by those people, as the IRS already had some form of software that picked up on most of the obvious errors, etc on their returns, which were usually very simple compared to those of say, Exxon or Dow. He said what was needed was ALOT funding so that the IRS had the staff and time to audit the large corporations (Exxon, etc) who had very complex returns and of course, accounting forms & tax attorneys helping them figure out ever possible loophole, concealment of income etc. That that's where the most cheating occurred. But you needed alot of skilled employees to review those complex returns. Read it in the Wall Street Journal, in the days when the Wall St. J had some excellent investigative journalists and editors who enabled those journalists opportunities to investigate corporate behaviors, good & bad. As expected, Congress and Biden have chosen to further bloat the DoD (and subsidize the privatization of military functions and the corporations that get those contracts) instead of funding the IRS or SSA well enough so that both agencies could provide the quality of service that people in the US deserve.

Rita

I agree. The tax evasion has gone on for decades by corporations. And, yes, lawmakers aren't doing enough to stop it. The under-funding of the IRS adds another layer of complexity.

Verify your Comment

Previewing your Comment

This is only a preview. Your comment has not yet been posted.

Working...
Your comment could not be posted. Error type:
Your comment has been posted. Post another comment

The letters and numbers you entered did not match the image. Please try again.

As a final step before posting your comment, enter the letters and numbers you see in the image below. This prevents automated programs from posting comments.

Having trouble reading this image? View an alternate.

Working...

Post a comment

Your Information

(Name and email address are required. Email address will not be displayed with the comment.)