The tax plan introduced by the administration of US President Donald Trump has allowed twice as many companies to pay zero taxes, according to a recent report.
The report by the Center for Public Integrity revealed that under the Trump tax plan, which is officially known as the Tax Cuts and Jobs Act, corporate tax rates were lowered from 35 percent to 21 percent resulting in the number of companies paying no taxes to go from 30 to 60 in its first year.
The Washington, DC-based think-tank, the Institute on Taxation and Economic Policy (ITEP) found that the number of companies exempted from taxes was more than twice as many as ITEP found roughly, per year.
Many of the country’s largest publicly-held corporations have reported that they owe absolutely nothing on the billions of dollars in profits they earned last year, it said.
ITEP reported that huge corporations have avoided paying even a dime in tax on billions of dollars in US profits.
At least 60 companies reported that their 2018 federal tax rates amounted to effectively zero, or even less than zero, on income earned on US operations.
Retail giant Amazon.com Inc. and entertainment streaming service Netflix Inc., in addition to global oil giant Chevron Corp., pharmaceutical manufacturer Eli Lilly and Co., and farming and commercial equipment manufacturer Deere & Co.were among the tax-exempted companies which earn billions dollars year-on-year.
The corporate companies reported were “able to zero out their federal income taxes on $79 billion in US pretax income,” according to the ITEPreport, which was released earlier this month.
Trump’s controversial tax cut bill slashed the corporate tax rate and eliminated and tightened certain deductions, while providing other new tax breaks to companies.
However, regular taxpayers, the middle-class professional workers in particular, were not expected to benefit from the Trump corporate tax cuts
The cut in the corporate tax rate alone is estimated to save big corporations $1.35 trillion over the next 10 years. The new Tax Cuts and Jobs Act was signed by Trump in December 2017.