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Middle class seniors forced to pay for that 40% corporate tax cut with reductions to Medicare

Happy holidays came a few days early for big corporations and rich shareholders. Their income tax rate in 2018 will drop from 35% to 21% – exactly a 40% decrease.

Next year, Medicare premiums will go from $109 to $134 per month – a 23% increase in one year. This additional deduction from Social Security benefits wipes out the proposed minimal 2% cost of living increase for most seniors, leaving them with no increase, just inflation losses.

The argument goes that most corporations deserve a tax decrease, because they pay higher income taxes (35%) here than in some other countries. Concerned about the tax burden on our “job creators”, I put together this list of the top 30 largest companies (sales) and what they paid in income tax in 2016.

All told, these firms paid $114.9 billion of income tax on $4,108 billion in sales, or 2.76% rate on sales.

By contrast, the median worker’s wage in the United States is $30,500. To calculate their tax, use a base of $18,500 (after $12,000 standard deduction) times 17.65% (Income+ FICA) for a total of $3,265, or 10.7%. Higher wage earners pay even larger percentages of tax.

  1. Wal-Mart – $485 billion sales / $6.2 billion tax
  2. Berkshire Hathaway – $223 billion sales / $9.2 billion taxes
  3. Apple – $217 billion sales / $15.8 billion tax
  4. ExxonMobil – $198 billion sales / -$400 million tax credit
  5. McKesson – $196 billion sales / $774 million tax
  6. UnitedHealth Group – $185 billion sales / $4.5 billion tax
  7. CVS Health – $180 billion sales / $3.3 billion tax
  8. General Motors – $166 billion sales / $2.4 billion tax
  9. AT&T – $164 billion sales / $6.5 billion tax
  10. Ford Motor – $152 billion sales / $2.2 billion tax
  11. AmerisourceBergen – $148 billion sales / $620 million tax
  12. Amazon – $136 billion sales / $1.4 billion income tax
  13. Cardinal Health – $127 billion sales / $800 million tax
  14. Verizon – $126 billion sales / $7.4 billion tax
  15. Costco – $121 billion sales / $1.3 billion tax
  16. General Electric – $120 billion sales / –$400 million tax credit
  17. Walgreens – $116 billion sales / $1 billion tax
  18. Kroger $115 billion sales / $1 billion tax
  19. Chevron – $110 billion sales / $1.7 billion tax
  20. JP Morgan – $103 billion sales / $9.8 billion tax
  21. Express Scripts – $100 billion sales / $1 billion tax
  22. Wells Fargo – $98 billion sales / $10 billion tax
  23. Home Depot – $95 billion sales / $4.5 billion tax
  24. Boeing – $95 billion sales / $700 million tax
  25. Bank of America – $92 billion sales / $6.4 billion tax
  26. Alphabet – $90 billion sales / $4.7 billion tax
  27. Microsoft – $85 billion sales / $3.3 billion tax
  28. Anthem – $85 billion sales / $2 billion tax
  29. Citigroup – $84 billion sales / $6.4 billion tax
  30. Comcast – $80 billion sales / $5.3 billion tax

Some companies on this list not only paid low taxes, but some even paid no tax, and are actually owed money by the government – Exxon and General Electric, for example.

Everyone knows that two companies with $318 billion in combined sales made money, and everyone also knows that big companies have seemed to fly under the radar of the IRS. Friendships? Campaign donations? Bribery?

What the politicians don’t tell you about corporate taxes is not just that probably nobody big pays 35%, but with a new 20% rate, we may add even more tax refunds next year to the big 30 list.

Good news is that weasels, who collude to avoid taxes for big firms, may see a staff reduction in their departments. After all, if you only pay 2.76% on sales now – with a 35% tax rate – imagine how low payments will be with 20% as the starting point?

For those of you who will point out that income tax is on profits, tell that to the wage earner, who pays income tax on rent, food and clothing – virtually everything. Or, agree to change the income tax to a sales tax for corporations at a low rate of 6% (same as my PA state sales tax) and we can more than double our government revenues, compared to that current 2.76%.

Categories: 2018 Budget, economic equality, Medicare, middle class, Taxes, wages

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