House Democrats have just proposed that the corporate tax rate be increased to 26.5% from the current 21.0%. The current rate was set by legislation passed under President Trump. The higher rates are intended to help cover the costs of the new $ 3 trillion spending program triggered by the Biden administration’s plans.
Corporate taxes paid by America’s largest corporations are complex. Taxes of companies operating abroad are often paid at lower rates in these countries. There have been many efforts, some successful, to tax these profits in the United States. However, some large companies pay no tax. They can operate at a loss, or they have deductions that prevent them from having to make annual payments.
On the other hand, some of the largest and most profitable businesses in the United States pay taxes at a rate far higher than the law stipulates.
Wallet Hub has just released its Corporate Tax Rate Report. The study examines federal, state and international taxes paid by S&P 500 companies. The overall tax rate for these companies is 20%. However, the authors specify:
Nine S&P 100 companies, Wells Fargo & Co, Salesforce.com Inc., AbbVie Inc., Duke Energy Corp., Adobe Inc., Broadcom Inc., International Business Machines Corp., Medtronic Inc and General Electric Co., do pay a negative overall tax rate and are therefore due to a discreet net tax benefit.
The company that paid the highest tax rate (94.67%) was Gilead Sciences, one of the largest biotech pharmaceutical companies in the world. In the last quarter, its revenue was $ 6.2 billion, up 21% year on year. Profit for the period was $ 1.21 per share, compared to a loss of $ 2.66 for the same period a year ago. Daniel O’Day, its chairman and chief executive officer, gave a partial reason for the success when the numbers were released:
We maintained our positive momentum in the second quarter, with both strong financial performance and solid progress in our increasingly diversified portfolio. Our flagship HIV therapy, Biktarvy, has seen continued growth and market share gains, despite the continued impact of the pandemic.
Here are the 10 U.S. companies that paid the highest taxes and their overall tax rates:
- Gilead Sciences (94.67%)
- Reservation (89.59%)
- Kraft Heinz (64.95%)
- Walgreen Boots Alliance (48.45%)
- Dow (37.52%)
- Mondelez International (36.18%)
- Altria (35.36%)
- Walmart (33.35%)
- United Parcel Service (27.17%)
- American Express (27.03%)
Click here to learn more about the top American companies from 1955 to 2010.