55 Major Corporations Paid $0 In 2020 Federal Taxes

[ttwtt78640]

It's impossible to say that it is "simply not so" if it has never been tried on a federal level. Regardless, I am on board with a national sales tax aka the "fair tax," albeit the fair tax is limited to retail sales. Thanks!!

Hmm... If that was not so then why does the “fair tax” include such an income based “prebate”?

 

[Logophile]

Hmm... If that was not so then why does the “fair tax” include such an income based “prebate”?

Foolishness, not to mention a sales tactic. It makes it easier to sell the idea. But, we already have social programs to provide for basic necessities. Those programs would remain in place, even enhanced. Corporate tax, capital gain and personal income tax do not work well for the economy. They blunt growth and more importantly, restrict freedom, which is - to me - of paramount importance. And fundamentally, it's so much more responsible and practical to tax the outtake, aka expenditures, than the intake, aka gross income. Thanks!!

 

[Kushinator]

And fundamentally, it's so much more responsible and practical to tax the outtake, aka expenditures, than the intake, aka gross income. Thanks!!

More ignorance.

You're actually arguing that we tax companies on their revenue and not their profits.

 

[ouch]

And who's fault is that. Did these companies break any IRS laws or did they just take advantage of the intended loopholes provided by low life corrupt politicians? Does your accountant also protect you by using the loopholes your entitled too?

Gives ya that warm and fuzzy feeling doesn't it?

 

[Da Mole]

What is that supposed to mean?

 

[SheWolf]

Sure. Between 2009 and 2018, 465 companies listed on the S&P 500 purchased about $4.3 trillion in their own shares. When a company buys back equity, it doesn't translate into economic growth... it's not investment in the sense of production.



Somewhat. IMO, monetary policy has more to do with stock prices well in excess of their traditional multiples. Stock buybacks are just a way to return profit to shareholders without assuming a tax liability in the process.

I read financial and trade news all the time. There is debate surrounding stock buy backs, and it's an ongoing discussion. I understand the appeal of stock buy backs, and they are not all bad, but there is a lot more going on with it being "just a way to return profit to shareholders."

Do you deny that the majority of CEO and executive compensation comes from stock options and stock rewards, and that they are free to manipulate their company's stock prices to their own benefit? Combine that with that fact that companies have soaring debt. Debt soared to a record high in Jan 2020, even before the pandemic, and was estimated (before accounting for the pandemic) to continue to soar to record highs. So when these companies got a zero tax liability, they did not pay off their debts. They did not reinvest the money. They used the money to manipulate stock prices which benefits the executive board, hedge fund managers, and short sellers. Continuing shareholders and employee stock option holders do not get the same benefits.

Debt continues to soar, but, hey, the senior executives are making out. A continued policy of running a company like this isn't going to end well, but does it really matter when you're a CEO with friends in high places like Congress? The majority of these pandemic stimulus packages are going to Wall Street and corporations despite them paying little to no taxes. We have a system of corporate welfare, and the wealthiest company's are racking up debt, paying no taxes, and will get a bailout any time their own business practices blow up in their faces.

 

[Kushinator]

Do you deny that the majority of CEO and executive compensation comes from stock options and stock rewards

Not at all.

Combine that with that fact that companies have soaring debt. Debt soared to a record high in Jan 2020, even before the pandemic, and was estimated (before accounting for the pandemic) to continue to soar to record highs. So when these companies got a zero tax liability, they did not pay off their debts. They did not reinvest the money. They used the money to manipulate stock prices which benefits the executive board, hedge fund managers, and short sellers. Continuing shareholders and employee stock option holders do not get the same benefits.

Paying back debt is similar to share buybacks. Buying an asset has an equivalent effect on the balance sheet as does exhausting a liability. However, stock performance is only a portion of executive compensation. There are always going to be revenue, net income, EBITA, costing, etc... considerations that are part of executive compensation. It's not solely tied to a single variable.

Debt continues to soar, but, hey, the senior executives are making out.

Asset levels have soared as well, and that has much to do with shareholder buybacks. Assets = Liabilities + Equity

A continued policy of running a company like this isn't going to end well, but does it really matter when you're a CEO with friends in high places like Congress? The majority of these pandemic stimulus packages are going to Wall Street and corporations despite them paying little to no taxes. We have a system of corporate welfare, and the wealthiest company's are racking up debt, paying no taxes, and will get a bailout any time their own business practices blow up in their faces.

I'm curious as to what companies you believe are being managed in such a way.?

 

[SheWolf]

Well, as I said, in this case, we would be exchanging taxing the same profits to the point at which the owners collected them; raising capital gains tax rates in order to lower chorister tax rates.

With these companies paying record low taxes and also getting record high financial support via stimulus bailouts, combined with the obvious macro economic risks these companies and their failures pose on the country and the global financial system, I don't see any valid reason why they shouldn't pay taxes. Mutli billion dollar companies benefit and rely on government provided resources: grants, infrastructure, roads, internet, an educated society, etc. Corporations just taking and never repaying isn't tolerable.

You may have these beliefs, but I look at the GOP and I think you're not being realistic. Do you really think Mitch McConnell is interested in raising capital gains? Do you really think Mitch McConnell is going to cut off these companies off of when it comes to bailouts? No, I think the majority of the GOP in Congress is absolutely cool with no corporate taxes and bailouts funded by people like me.

 

[SheWolf]

I mean, we don't necessarily have to tax corporations. We choose to do so. IMO, it would be more efficient to tax individuals in a truly progressive fashion. We can almost certainly tax stock buy-backs as well, given there is some risk of deadweight loss.

I mean, we don't have to necessarily tax anybody or anything. We choose to do so.

What kind of argument is that?

 

[Kushinator]

I mean, we don't have to necessarily tax anybody or anything. We choose to do so.

What kind of argument is that?

It's simply a matter of fact. Taxing corporations was a theme of the post-WWII economy. But now in a global environment with international capital mobility, a modern approach to taxation and regulation is necessary for U.S. companies to be competitive and/or not dedicate so much of their operations on reducing tax liabilities on the business end. If a wealthy executive wants to lower their tax liability... let them do it on their own end, without using corporate resources to achieve this goal.

 

[cpwill]

. Do you really think Mitch McConnell is interested in raising capital gains?

In return for no corporate taxes? I have no idea. I would, that's all

 

[SheWolf]

Not at all.



Paying back debt is similar to share buybacks. Buying an asset has an equivalent effect on the balance sheet as does exhausting a liability. However, stock performance is only a portion of executive compensation. There are always going to be revenue, net income, EBITA, costing, etc... considerations that are part of executive compensation. It's not solely tied to a single variable.



Asset levels have soared as well, and that has much to do with shareholder buybacks. Assets = Liabilities + Equity



I'm curious as to what companies you believe are being managed in such a way.?

Again, I read a lot of financial news. It is my job. It's an undeniable fact that corp debt is soaring and publicly traded companies did not use the tax cut earnings to reinvest or pay off debt. They used it to buy back stock options, and there was a huge market response to it. The market reacted to that very fact.

Furthermore, there are tons of studies on this very topic.
In July 2017, the Institute for New Economic Thinking published a paper titled

"US Pharma’s Financialized Business Model" on pharmaceutical companies and their share buyback and dividend strategy.

The study found that share buybacks weren't being used in ways to grow the company, and in many cases, total share buybacks outnumbered funds spent on research and development (R&D). The report stated:

In the name of 'maximizing shareholder value' (MSV), pharmaceutical companies allocate the profits generated from high drug prices to massive repurchases, or buybacks, of their corporate stock for the sole purpose of giving manipulative boosts to their stock prices. Incentivizing these buybacks is stock-based compensation that rewards senior executives for stock-price performance.

Stock buy backs do not represent real economic growth or paying off debt. It's a supply manipulation. Yes, it's a nice trick to lift stock prices, usually temporarily, and allows executives to hit quarterly EPS targets. There is no reason to act like it benefits the Balance Statement.

 

[Kushinator]

It's an undeniable fact that corp debt is soaring and publicly traded companies did not use the tax cut earnings to reinvest or pay off debt.

So? It's an undeniable fact that corporate assets are also soaring... so much that shareholder equity ( assets - liabilities) continues to grow.

Stock buybacks do not represent real economic growth or paying off debt.

I've already pointed out stock buybacks are not going toward production. However, they are the equivalent in terms of the balance sheet as it results in additional shareholder equity.

It's a supply manipulation. Yes, it's a nice trick to lift stock prices, usually temporarily, and allows executives to hit quarterly EPS targets.

Stock buybacks actually lower EPS as share price (denominator) grows with buybacks. What you meant to say is market capitalization targets.

There is no reason to act like it benefits the Balance Statement.

See the graph.

 

[SheWolf]

So? It's an undeniable fact that corporate assets are also soaring... so much that shareholder equity ( assets - liabilities) continues to grow.



I've already pointed out stock buybacks are not going toward production. However, they are the equivalent in terms of the balance sheet as it results in additional shareholder equity.



Stock buybacks actually lower EPS as share price (denominator) grows with buybacks. What you meant to say is market capitalization targets.



See the graph.

Your link didn't work, but your Balance Sheet argument has no value in this discussion anyway. I know how T stock management impacts cash and equity. Buying shares back will decrease assets (cash) and increase equity.

As for buybucks, they actually do increase EPS.

Because a share repurchase reduces the number of shares outstanding, it increases earnings per share (EPS). A higher EPS elevates the market value of the remaining shares. After repurchase, the shares are canceled or held as treasury shares, so they are no longer held publicly and are not outstanding.

How Share Repurchases Can Raise the Price of a Company's Stock

A share repurchase is when a company buys back its own shares from the marketplace, which increases the demand for the shares and the price.

www.investopedia.com

.

Increasing EPS is why back buys are very lucrative to senior executives and CEOs. The more they increase EPS, the higher their targets and payouts.

 

[SheWolf]

In return for no corporate taxes? I have no idea. I would, that's all

I know you would. That's what you say anyway. The funny thing is that no conservative either in Congress or just an average person like yourself ever argues to increase capital gains taxes. That's not a debate this country ever seems to have. Considering the current state of our politics, I would say it's likely corporate taxes keep getting lowered, capital gains will most likely stay low, most GOP leadership will probably fight to get them to near zero, and the middle class will end up paying the majority of taxes including bailouts.

 

[Integrityrespec]

Gives ya that warm and fuzzy feeling doesn't it?


55 Major Corporations Paid $0 In 2020 Federal Taxes | The Daily Caller
The Fortune 500 corporations, including Nike, Salesforce, Dish Network and FedEx, were able to leverage tax breaks in the Tax Cuts and Jobs Act (TCJA) of 2017, which lowered the corporate tax rate to 21%, and the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act, according to the report.

While the 55 companies collectively earned more than $40 billion in profits last year, they paid no federal taxes, the report found. They would have paid $8.5 billion at the current corporate tax rate of 21%.

Who is to blame for that? Democrats just as much as republicans. The congress writes and votes on those tax laws and both democrats and republicans vote in policy that has allowed their contributors to get away with little or no federal tax payments. Obama had the house and senate in his first term, he had a filibuster proof congress then and you didn't see him and the democrats do anything to make Amazon or other democrat supporters pay up "their fair share" did you.

 

[Kushinator]

Your link didn't work

It does work for me... but here is the graph:

As we can clearly observe, liabilities are not outpacing assets, and therefore the idea that companies are taking on excessive debt or what not is invalid.

Sorry, i'm on mobile.

I know how T stock management impacts cash and equity. Buying shares back will decrease assets (cash) and increase equity.

But why this comment?

It's an undeniable fact that corp debt is soaring and publicly traded companies did not use the tax cut earnings to reinvest or pay off debt.

As for buybucks, they actually do increase EPS.

My apologies, i was thinking about PE ratios and confused the terminology. However, stock buybacks are a net wash on EPS, because the price of the stock will increase relative to the buyback, keeping EPS in stasis.

 

[cpwill]

I know you would. That's what you say anyway. The funny thing is that no conservative either in Congress or just an average person like yourself ever argues to increase capital gains taxes. That's not a debate this country ever seems to have.

LOTS of people want to increase capital gains. Unfortunately, they generally also want to leave or raise corporate rates, leaving us net worse off. :-/

Considering the current state of our politics, I would say it's likely corporate taxes keep getting lowered, capital gains will most likely stay low, most GOP leadership will probably fight to get them to near zero, and the middle class will end up paying the majority of taxes including bailouts.

nah. The US has pretty much the most progressive tax system in the world. Our middle class is taxed pretty lightly, comparatively.

 

[Kushinator]

nah. The US has pretty much the most progressive tax system in the world. Our middle class is taxed pretty lightly, comparatively.

That's not an argument against a more progressive tax structure.

Every other country basically regulates away much of their financial sector. Personally, I'd rather tax something than restrict it.

 

[cpwill]

That's not an argument against a more progressive tax structure.

It wasn't raised as one.

Every other country basically regulates away much of their financial sector. Personally, I'd rather tax something than restrict it.

 

[Kushinator]

It wasn't raised as one.

It should be noted though.

 

[cpwill]

It should be noted though.

Until we get the inevitable complaint that we should have a progressive tax system Like They Do In Europe.

 

[craig]

Gives ya that warm and fuzzy feeling doesn't it?


55 Major Corporations Paid $0 In 2020 Federal Taxes | The Daily Caller
The Fortune 500 corporations, including Nike, Salesforce, Dish Network and FedEx, were able to leverage tax breaks in the Tax Cuts and Jobs Act (TCJA) of 2017, which lowered the corporate tax rate to 21%, and the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act, according to the report.

While the 55 companies collectively earned more than $40 billion in profits last year, they paid no federal taxes, the report found. They would have paid $8.5 billion at the current corporate tax rate of 21%.

Income and profits should not be taxed, we want people to work and innovate, we need entrepreneurs, that makes our economy go. A 5% wealth tax would fund our government.

 

[Bullseye]

Gives ya that warm and fuzzy feeling doesn't it?


55 Major Corporations Paid $0 In 2020 Federal Taxes | The Daily Caller
The Fortune 500 corporations, including Nike, Salesforce, Dish Network and FedEx, were able to leverage tax breaks in the Tax Cuts and Jobs Act (TCJA) of 2017, which lowered the corporate tax rate to 21%, and the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act, according to the report.

While the 55 companies collectively earned more than $40 billion in profits last year, they paid no federal taxes, the report found. They would have paid $8.5 billion at the current corporate tax rate of 21%.

So, CoronaVirus and CARES were the big problems? Weren’t those Nancy’s babies?

 

[Individual]

Gives ya that warm and fuzzy feeling doesn't it?


55 Major Corporations Paid $0 In 2020 Federal Taxes | The Daily Caller
The Fortune 500 corporations, including Nike, Salesforce, Dish Network and FedEx, were able to leverage tax breaks in the Tax Cuts and Jobs Act (TCJA) of 2017, which lowered the corporate tax rate to 21%, and the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act, according to the report.

While the 55 companies collectively earned more than $40 billion in profits last year, they paid no federal taxes, the report found. They would have paid $8.5 billion at the current corporate tax rate of 21%.

Which is why I promote a Federal tax on stock market purchases.