President Trump on Dec. 13. Photo: Alex Wong/Getty Images
91 Fortune 500 companies paid no federal income taxes on their U.S. income last year, according to a report released Monday by the Institute on Taxation and Economic Policy.
Why it matters: Some of the companies that paid no federal income tax last year still made billions of dollars — and they include some of the country's biggest names, like Amazon, Chevron, Halliburton and IBM.
The big picture: The 379 profitable members of the Fortune 500 paid an effective federal tax rate of 11.3% last year — almost half of the 21% corporate rate established under President Trump's 2017 tax revamp.
- That effective rate was the lowest since the organization began publishing its corporate tax studies in 1984.
- Large companies were able to pay lower rates through a combination of deductions, tax breaks and other loopholes.
- Had those companies paid the statutory 21% rate on their profits, they would have collectively owed the federal government an additional $73.9 billion.
The state of play: Despite strong economic growth, the federal deficit is soaring. In the first 11 months of fiscal year 2019, it exceeded $1 trillion and has already hit $342 billion for the first two months of 2020's fiscal year.
- The lower corporate tax rate isn't the sole driver of the deficit, but it certainly contributes. Corporate tax revenue dropped from about $297 billion in 2017 to $204 billion in 2018.
Go deeper: Tax cuts could be a curse for U.S. companies