Comments by "Voix de la raison" (@voixdelaraison593) on "‘CATASTROPHIC’: Expert warns UAW strike will have ‘disastrous’ impact" video.
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@oldsrocket8841 Nineteen of the biggest companies in the U.S. paid very little in federal income tax last year, according to a new report provided exclusively to Axios by the progressive think tank Center for American Progress (CAP). Four companies paid less than zero in federal income tax, including AT&T, Charter Communications, American International Group and Dow Inc.
Why it matters: Corporate profits surged to record highs last year, thanks in part to copious amounts of government spending. The idea that companies that earned billions aren't paying any federal tax is sure to fuel simmering criticisms from Democratic lawmakers.
"These are huge profitable corporations, and they hardly pay any taxes," said Seth Hanlon, a senior fellow at CAP who coauthored the report. "It's a glaring sign that something is wrong with the tax system."
The backstory: Companies have been paying lower taxes since the 2017 passage of President Trump’s signature Tax Cuts and Jobs Act, which cut the official rate to 21% from 35%. The 19 companies on CAP’s list all paid an effective rate below 10% — or less than half the official rate.
Before the law passed, many companies were already paying about half the official tax rate — but it was higher number, around 17% on average, said Matthew Gardner, a senior fellow at the Institute on Taxation and Economic Policy (ITEP), which has been scrutinizing these numbers for decades.
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@oldsrocket8841 EISINGER: Yeah, sure. So for the billionaire class, what's really important is how much their wealth grows in a given year. The rest of us, we have income, and we need income to live. But for the billionaire class, they don't actually need income. They avoid income. If you avoid income, you avoid taxes. And so it turns out that the billionaire class pays much less in tax than average people. And what we found is that Jeff Bezos and Elon Musk and Michael Bloomberg and Carl Icahn, they literally, in recent years, paid zero in federal income tax. And what you do is you let your mountain of wealth grow over time. You let Amazon stock grow. Or if you're Warren Buffett, you let Berkshire Hathaway go up and up and up. And you never sell. And if you never sell, you don't take any income.
And how are these people living if they don't sell? Well, often, what they do is they borrow against their wealth. And if you're borrowing against your wealth, that's not taxed. So ultimately, what we found was that the ultrawealthy in this country, they had wealth growth of $400 billion from 2014 to 2018, and they paid about $14 billion in taxes. And so average people pay roughly 15% in federal income taxes effectively, and the ultrawealthy paid 3.4% when compared to their wealth growth.
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