Ethics & Religion
Column #2,078
June 9, 2021
55 Corporations Pay No Tax
By Mike McManus
55 major U.S. companies, such as Nike, FedEx, Salesforce and Archer
Daniels Midland, paid $0 in federal taxes on their 2020 profits.
According to the Institute on Taxation and Economic Policy (ITEP) no
fewer than 55 publicly traded firms avoided federal income taxes last
year, despite reporting nearly $40.5 billion in combined pre-tax
profits.
Of those 55 companies, 26 were identified by ITEP as having paid no
federal income taxes for three consecutive years on a combined $77
billion in earnings over three years.
President Biden asserted, "You have 51 or 52 corporations of the Fortune
500 (that) haven't paid a single penny in taxes in three years." Biden
told reporters, "Come on. Let's get real." As he said in the Oval
Office, "It's just not fair. It's not fair to the rest of the American
taxpayers."
Under Biden's plan, corporations would pay at least $2 trillion more in
taxes than they do now. The plan also includes aggressive measures to
prevent multinational corporations from reducing their U.S. tax base by
shifting profits overseas.
France, Germany and Italy said that a new U.S. proposal for global
minimum corporate tax rate of 15% was a good basis for sealing an
international deal by July.
The U.S. Treasury Department offered to accept a minimum rate of at
least 15%, significantly below its proposed 21% minimum on U.S.
multinational firms.
It made the proposal at the Paris-based Organization for Economic
Cooperation and Development (OECD) where nearly 140 countries aim to
reach broad agreement this summer to rework rules for taxing
multinational groups and big technology companies such as Google and
Facebook Inc.
"Treasury proposed to the steering group that the global minimum tax
rate should be at least 15%," the department said in a statement.
"Treasury underscored that 15% is a floor and that discussions should
continue to be ambitious and push the rate higher."
U.S. Treasury Secretary Janet Yellen first proposed a 21% U.S. corporate
minimum tax in April as part of President Joe Biden's $2.2 trillion
infrastructure spending proposal, which would be financed largely by
increasing the U.S. corporate tax rate from 21% to 28%.
The Trump Administration and congressional Republicans in 2017 cut the
corporate tax rate to 21% from 35%. At the same time, the Treasury
launched a U.S. minimum tax, of 10.5%, known as the Global Intangible
Law-Taxed Income Tax (GILTI) to capture revenue shifted by companies to
tax-haven countries.
The Biden Administration proposed 21% GILTI rate was widely viewed as a
starting point for renewed OECD talks on a global minimum tax.
While France and Germany backed the 21%, other countries have pushed for
a lower rate, as previous OECD discussions on the subject had centered
around 12.5%, the same rate charged by Ireland.
"The last proposal made by the United States could be a good
compromise," French Finance Minister Bruno Le Maire said as he arrived
for talks with Euro Zone counterparts in Lisbon.
His German counterpart, Olaf Scholz, welcomed the new U.S. proposal as
"big progress" and EU Economic Commissioner Paolo Gentiloni said it was
a step forward to a deal, as did Italian Economy Minister Daniele
Franco.
All hoped that talks would be wrapped up as planned by a July meeting of
G20 finance ministers, amid suggestions from the OECD that it could take
until October to finalize a deal.
Two Euro officials at the meeting in Lisbon said that the U.S. offer
would find wide backing in the broader European Union. "That 15% will be
acceptable for all EU member states, including Luxembourg and Ireland,"
one of the officials said.
Britain, which is due to host an online meeting of finance ministers
next week, remains concerned that the latest U.S. proposals do not
address the challenge of ensuring large multinationals, especially tech
companies, pay more tax in countries where they generate revenue.
The U.S. Treasury official said the Biden Administration will continue
to advocate for the highest rate possible above 15%, such as the 21%
proposed U.S. minimum tax.
However, Marial Corwin, head of KPMC's Washington National Tax practice,
and a former Treasury official, asserted "The 15% rate is certainly more
realistic given where other countries are."
"Importantly, this is signaling that the U.S. is willing to accept a
global minimum tax that is well below the rate they are proposing for
GILTI," she added. "I suspect it was important for reaching agreement at
the OECD that the U.S. is willing to agree to something well below 21%."
No corporation should get away with paying no taxes. That's the new
consensus.
It's simply not fair.
_________________________
Copyright (c)2021 Michael J. McManus, a syndicated columnist and past president of Marriage Savers. To read past columns, go to
www.ethicsandreligion.com. Hit
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