Big corporations are lobbying Congress to extend the Trump-era bonus depreciation rules that allowed them to immediately write off 100% of their eligible costs each year through 2022. They claim that without this tax cut (which they seek to make retroactive to the beginning of 2023), they will be forced to roll back business investments. But the reality is that when the 100% bonus depreciation tax cut was fully in effect from 2018 to 2022, these same corporations spent their tax windfall to enrich their executives and wealthy shareholders instead.
An analysis by Americans for Tax Fairness reveals that a dozen of the biggest corporate beneficiaries of bonus depreciation reaped nearly $43 billion in tax savings from the loophole over the first five years (2018-2022) it was in full effect. Combined, these handful of corporations reported over $1 trillion in pre-tax profits during the same time period, while paying a collective effective federal rate of only 11.6%—far lower than the statutory corporate tax rate of 21%.
Over that same 2018-2022 span, they poured hundreds of billions of dollars into non-productive activities that mostly enriched just a handful of ultra-wealthy individuals at taxpayer expense, including $526 billion on stock repurchases, $251 billion on dividend payments, and $6.4 billion on executive compensation.
If Congress agrees to make the Trump bonus depreciation rules permanent, the public will lose out on $325 billion in revenue over the next decade and the winners will be top corporate executives and wealthy shareholders. Instead, Congress should reject these threats of disinvestment, and encourage these hugely profitable firms to spend some of their own rich cash reserves before demanding another tax-cut handout.
The following is a list of a dozen mega-corporations that have benefited disproportionately from the Trump-era bonus-depreciation tax break over the last five years (2018 to 2022), along with a comparison of how much these corporations spent on further enriching the already wealthy.
GOOGLE (ALPHABET)
Reported $205 billion in pre-tax domestic income
Paid an effective federal tax rate of 16.6%
Received a $6.1 billion tax cut from Trump-era depreciation rules (cutting their effective tax rate by one-seventh)
Paid their top five executives $1.1 billion in compensation packages
Spent $168 billion on stock buybacks
AMAZON
Reported $69 billion in pre-tax domestic income
Paid an effective federal tax rate of 8.9%
Received a $6.5 billion tax cut from Trump-era depreciation rules (cutting their effective tax rate in half)
Paid their top five executives $713 million in compensation packages
Spent $6 billion on stock buybacks
BANK OF AMERICA
Reported $135 billion in pre-tax domestic income
Paid an effective federal tax rate of 3.9%
Received a $1.2 billion tax cut from Trump-era depreciation rules (cutting their effective tax rate by one-fifth)
Paid their top five executives $504 million in compensation packages
Spent $85 billion on stock buybacks
Spent $37 billion in dividend payments to shareholders
GENERAL MOTORS
Reported $33 billion in pre-tax domestic income
Paid an effective federal tax rate of 1.3%
Received a $1.5 billion tax cut from Trump-era depreciation rules (cutting their effective tax rate by three quarters)
Paid their top five executives $318 million in compensation packages
Spent $2.7 billion on stock buybacks
Spent $5.8 billion in dividend payments to shareholders
INTEL
Reported $52 billion in pre-tax domestic income
Received a $3.8 billion tax cut from Trump-era depreciation rules
Paid their top five executives $637million in compensation packages
Spent $41 billion on stock buybacks
Spent $28 billion in dividend payments to shareholders
JPMORGAN CHASE
Reported $172 billion in pre-tax domestic income
Paid an effective federal tax rate of 10.1%
Received a $990 million tax cut from Trump-era depreciation rules
Paid their top five executives $665 million in compensation packages
Spent $72 billion on stock buybacks
Spent $62 billion in dividend payments to shareholders
MARATHON PETROLEUM
Reported $22 billion in pre-tax domestic income
Paid an effective federal tax rate of 10.7%
Received a $1.1 billion tax cut from Trump-era depreciation rules (cutting their effective tax rate by one-third)
Paid their top five executives $271 million in compensation packages
Spent $22 billion on stock buybacks
Spent $7 billion in dividend payments to shareholders
FACEBOOK (META)
Reported $110 billion in pre-tax domestic income
Received a $5.7 billion tax cut from Trump-era depreciation rules (cutting their effective tax rate by one-fifth)
Paid their top five executives $672 million in compensation packages
Spent $96 billion on stock buybacks
PEPSICO
Reported $22 billion in pre-tax domestic income
Paid an effective federal tax rate of 15%
Received a $729 million tax cut from Trump-era depreciation rules (cutting their effective tax rate by one-sixth)
Paid their top five executives $296 million in compensation packages
Spent $8.6 billion on stock buybacks
Spent $28 billion in dividend payments to shareholders
TARGET
Reported $20 billion in pre-tax domestic income
Paid an effective federal tax rate of 13.8%
Received a $1.3 billion tax cut from Trump-era depreciation rules (cutting their effective tax rate by one-third)
Paid their top five executives $213 million in compensation packages
Spent $15 billion on stock buybacks
Spent $7 billion in dividend payments to shareholders
UNITED PARCEL SERVICE
Reported $35 billion in pre-tax domestic income
Paid an effective federal tax rate of 13.8%
Received a $2.5 billion tax cut from Trump-era depreciation rules (cutting their effective tax rate by one-third)
Paid their top five executives $246 million in compensation packages
Spent $6 billion on stock buybacks
Spent $18 billion in dividend payments to shareholders
VERIZON
Reported $114 billion in pre-tax domestic income
Paid an effective federal tax rate of 7.8%
Received a $6.6 billion tax cut from Trump-era depreciation rules (cutting their effective tax rate by one-third)
Paid their top five executives $353 million in compensation packages
Spent $51 billion in dividend payments to shareholders
WALT DISNEY
Reported $39 billion in pre-tax domestic income
Paid an effective federal tax rate of 7.7%
Received a $4.5 billion tax cut from Trump-era depreciation rules (cutting their effective tax rate by half)
Paid their top five executives $499 million in compensation packages
Spent $4 billion on stock buybacks
Spent $7 billion in dividend payments to shareholders