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.
- Wal-Mart – $485 billion sales / $6.2 billion tax
- Berkshire Hathaway – $223 billion sales / $9.2 billion taxes
- Apple – $217 billion sales / $15.8 billion tax
- ExxonMobil – $198 billion sales / -$400 million tax credit
- McKesson – $196 billion sales / $774 million tax
- UnitedHealth Group – $185 billion sales / $4.5 billion tax
- CVS Health – $180 billion sales / $3.3 billion tax
- General Motors – $166 billion sales / $2.4 billion tax
- AT&T – $164 billion sales / $6.5 billion tax
- Ford Motor – $152 billion sales / $2.2 billion tax
- AmerisourceBergen – $148 billion sales / $620 million tax
- Amazon – $136 billion sales / $1.4 billion income tax
- Cardinal Health – $127 billion sales / $800 million tax
- Verizon – $126 billion sales / $7.4 billion tax
- Costco – $121 billion sales / $1.3 billion tax
- General Electric – $120 billion sales / –$400 million tax credit
- Walgreens – $116 billion sales / $1 billion tax
- Kroger $115 billion sales / $1 billion tax
- Chevron – $110 billion sales / $1.7 billion tax
- JP Morgan – $103 billion sales / $9.8 billion tax
- Express Scripts – $100 billion sales / $1 billion tax
- Wells Fargo – $98 billion sales / $10 billion tax
- Home Depot – $95 billion sales / $4.5 billion tax
- Boeing – $95 billion sales / $700 million tax
- Bank of America – $92 billion sales / $6.4 billion tax
- Alphabet – $90 billion sales / $4.7 billion tax
- Microsoft – $85 billion sales / $3.3 billion tax
- Anthem – $85 billion sales / $2 billion tax
- Citigroup – $84 billion sales / $6.4 billion tax
- Comcast – $80 billion sales / $5.3 billion tax
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%.