These 8 profitable tech giants paid less in federal taxes than you did last year
A number of well-known tech companies have the dubious honor of paying zero (or less than zero) corporate income taxes in the first year after the passage of the Trump tax law. That’s according to a new review by the Institute on Taxation and Economic Policy, which looked at taxes paid in 2018—the first full year with the tax breaks in effect—by America’s biggest (profitable) companies.
Here’s a breakdown of the tech companies on the list:
A total of 91 companies paid less than zero in income taxes during 2018. Another 56 companies paid between zero and 5%.
Collectively, however, tech companies paid among the highest corporate tax rates. The “Internet Services & Retailing” sector paid at a 20.2% rate, while the “Computers, office equip, software, data” sector paid 20.4%.
Overall, the 379 Fortune 500 companies in the ITEP report paid an effective federal income tax rate of just 11.3%—roughly half the statutory 21% rate prescribed by the Tax Cuts and Jobs Act (TCJA).
The law was intended to stoke the economy by lessening the tax burden on U.S. companies, freeing them to hire more people. But it also provided a widened set of loopholes by which companies could pay far less than the new 21% rate prescribed by the law.
Corporate tax cuts can provide a brief sugar high for the economy. But with all the promises from Trump and the GOP, the economy didn’t grow that much. It grew 2.4% in fiscal 2017 and grew 2.9% in 2018, the first full fiscal year with the cuts in place.
And that meager gain comes at a heavy cost. The tax cuts have caused the federal deficit to grow to $984 billion, as of the end of September. That’s more than double the deficit in 2015.