Some of America’s biggest companies paid little to no federal income tax in 2018

Big companies have long capitalized on business-friendly laws to minimize their tax liability. Now, President Trump’s tax law is making it even easier for profitable corporations to reduce what they owe the government.

Case in point: Companies ranging from internet giants Amazon and Netflix to industrial bellwethers General Motors and U.S. Steel could end up paying as little as $0.00 in federal income tax this year despite recording hefty profits. Some companies will also collect large tax rebates.

Defenders of the corporate cuts under the tax law that took effect this year, which lowered the rate companies pay to 21 percent from from 35 percent, contend they will plump profits, drive investment and boost economic growth. Opponents say the drop in corporate income tax revenue will grow the deficit and make it harder to fund public programs.

There is no suggestion that companies seeing a dramatic dip in their tax obligations are doing anything against the law — indeed, it is the prospect of already thriving Fortune 500 companies legally reaping large tax windfalls that is giving ammunition to progressive critics and lawmakers. Sen. Bernie Sanders, a candidate for the 2020 Democratic presidential nomination, recently claimed on Twitter that the $119 Amazon Prime members pay annually for perks, including free two-day shipping, is more than the online retail giant paid in taxes last year.
Paying their fair share?

According to a recent analysis of Amazon’s regulatory filings, the e-commerce company won’t pay a cent in federal income tax this year, despite its profits soaring to $11.2 billion in 2018, nearly double the $5.6 billion it earned the previous year. It would be the second year in a row Amazon paid no federal tax, said the left-leaning Institute on Taxation and Economic Policy, which estimated the company’s effective tax rate for 2018 at -1 percent.

Amazon dismisses ITEP’s tax analysis and notes that its profit margins on more than $232 billion in revenue last year are in the single digits. “Amazon pays all the taxes we are required to pay in the U.S. and every country where we operate, including paying $2.6 billion in corporate tax [worldwide] and reporting $3.4 billion in tax expense over the last three years,” the company said in a statement to CBS MoneyWatch.

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