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A group of congressional Democrats and Independent Sen. Bernie Sanders on Friday highlighted dozens of profitable U.S. corporations that have paid their executives more than they’ve paid in federal income taxes in recent years, a problem that the lawmakers attributed in large part to former President Donald Trump’s massive tax-cut package that Republicans are working to extend.
“In the first five years following the 2017 giveaway, 35 companies raked in $277 billion in domestic profits and paid their executives $9.5 billion — more than they paid in federal income taxes,” the lawmakers noted in letters to each of the companies, pointing to recent research by the Institute for Policy Studies and Americans for Tax Fairness.
“Next year, Congress will decide what to do with these corporate giveaways. Republicans have promised to go even further if elected and cut the corporate income tax rate from 21% to 15%,” the lawmakers continued. “This additional tax giveaway would provide Fortune 100 corporations as a whole with another $50 billion each year, more than all current K-12 federal education spending.”
Sens. Elizabeth Warren (D-Mass.) and Sheldon Whitehouse (D-R.I.) in the Senate and Rep. Greg Casar (D-Texas) in the House led the letters to the 35 companies, a list that includes high-profile names such as Netflix, Ford, and Tesla, whose CEO is the richest man in the world.
“Tesla is among the most dramatic examples of this phenomenon — big, profitable corporations that have actually been paying their top executives more than they pay the government in federal income taxes,” the lawmakers wrote. “According to an analysis by the Institute for Policy Studies and Americans for Tax Fairness, in the period between 2018 and 2022, Tesla raked in $4.4 billion in profits and did not pay a single dollar in federal income tax.”
During that same period, Tesla chief executive Elon Musk received “the largest pay package ever recorded for a company’s CEO,” the lawmakers observed.
The other companies that have paid their top executives more than they’ve paid in federal taxes in recent years are T-Mobile, AIG, NextEra, Darden, MetLife, Duke Energy, First Energy, DISH, Principal Financial, American Electrical Power, Kinder Morgan, Dominion, Oneok, Williams, Xcel Energy, NRG Energy, Salesforce, DTE Energy, Ameren, Sempra Energy, U.S. Steel, Entergy, AmerisourceBergen, PPL, CMS Energy, Evergy, Voya Financial, Atmos Energy, Alliant Energy, Match Group, UGI, and Agilent Tech.
The lawmakers demanded that the companies’ CEOs answer several questions, including how much the corporations would have paid in federal taxes had the 2017 Tax Cuts and Jobs Act (TCJA) not been enacted and how much they’ve spent on lobbying to keep the Republican law intact.
“The windfall from TCJA to big businesses, executives, and wealthy shareholders is unmistakable,” the letters read. “A recent analysis by the Institute on Taxation and Economic Policy found that 342 companies paid an average effective income tax rate of just 14.1% during the five years after TCJA passed, almost a third less than the 21% statutory rate. The gains do not ‘trickle down’ — 90% of workers saw no earnings increase, while executives making $989,000 per year or more got an average raise of $50,000.”
The letters were released days after the Economic Policy Institutereleased an analysis showing that CEO pay has soared by 1,085% since 1978 while the pay of typical U.S. workers has grown by just 24%.
The 2017 Trump-GOP tax law led major companies to splurge on stock buybacks, a major gift to corporate executives whose annual compensation packages consist largely of stock.
“President [Joe] Biden and Democrats in Congress are committed to making corporations pay their fair share,” the lawmakers wrote in their letters. “In the 2022 Inflation Reduction Act, we passed the first corporate tax increase in 30 years with the 15% corporate minimum tax. Though significant, raising $222 billion from billion-dollar corporations, it is not enough on its own to undo the corporate tax giveaways signed into law by President Trump and ensure that corporations pay their fair share.”
“Next year,” they added, “Congress has an opportunity to take bigger strides in reforming our tax code — to raise the corporate rate, close loopholes, and hold big businesses to the same standards as everyday working Americans who pay their fair share.”
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