Greatness should be recognized. And that’s why here at The Couch Report, VICE News’ weekly online national affairs show, we took a moment to recognize creativity, imagination and ingenuity…in corporate tax avoidance.
Anyone can pay their taxes. Heck, with personal income tax returns due May 17, you probably just did. But earning billions in profits, and then getting the government to pay you hundreds of millions in tax rebates, takes real panache.
That’s exactly what many big corporations did this year, once again. At least fifty-five companies managed to book a combined total of more than $40 billion in pre-tax profits in their most recent fiscal year, while reducing their corporate income tax bill to zero, according to the Institute on Taxation and Economic Policy (ITEP). Those companies include big names like Fedex, Salesforce and Dish Network.
Even better, all of this activity is perfectly legal. It’s just another example of big corporations using the laws, and fully-legal tax loopholes, that exist to their maximum potential.
The award for Best New Artist goes to Zoom, which managed to increase profits exponentially during the pandemic while keeping its corporate income tax bill at zero, according to ITEP.
Zoom reported making $672 million the fiscal year ending January 31, up more than 3,000 percent from the year before.
The company managed to reduce its taxes, in part, by booking a $300 million tax credit from 2019 to use against future earnings. But according to CBS Moneywatch, the biggest reason for the company’s low tax burden for 2020 was shelling out $580 million in stock compensation to executives and employees.
The company has said it “complies with all applicable tax laws in the countries where we do business.”
None of these great performances would be possible without the help of a political institution dedicated to excellence. So the prize for Best Supporting Actor goes to… U.S. Congress.
Lawmakers passed a massive tax cut in 2017 under former President Donald Trump that reduced the corporate income tax rate from 35 percent to 21 percent.
A lot of companies are big tax stars, but they can’t all be winners.
And this year’s Golden Couch Award goes to… Nike!
Nike didn’t pay a single red cent on almost $2.9 billion in U.S. pre-tax income last year, according to ITEP. Instead, it got a $109 million tax rebate.
This is hardly Nike’s first triumph. During the three years since Congress passed the Trump-era tax breaks of 2017, Nike booked a total of $4.1 billion in pre-tax income, and received $741 million in federal income tax rebates, giving the company an effective tax rate of negative 18 percent.
Nike has said it follows the tax rules in all the countries in which it operates.
“NIKE, Inc. is a global business with 73,000 employees and we comply with tax laws everywhere we do business,” the company said in a statement last month. “NIKE is paying significant U.S. federal, state, and local direct and indirect taxes every year. In fact, including customs duties, Nike has paid more than $9.1 billion in U.S. taxes since 2016.”
Customs duties, of course, aren’t the same as corporate income tax, and ITEP’s analysis of profits and income tax payments covers the years from 2018 onward, and doesn’t address 2016.
You have to admire true artistry.