Giant Corporations Will Literally Spend Six Figures To Avoid Paying Taxes

by William Rice

Congress is getting a huge influx of lobbying right now as giant corporations look for a year-end tax handout. The Business Roundtable (BRT)—a corporate lobby group made up of big company CEOs—is lobbying for the reversal of three corporate tax hikes at a cost to all the rest of us over $650 billion in lost public revenue. According to Politico, the group is embarking on a “six-figure” PR campaign to scare the public into believing that these tax provisions are “putting American companies at a competitive disadvantage.”

Leading the charge as chair of the BRT is the CEO of General Motors, Mary Barra. She has a particular interest in reversing one of those provisions—one that has nothing to do with the general “competitiveness” of Corporate America or, by implication, the American economy.  

GM avoided $1.5 billion in federal income taxes over a recent five-year span by exploiting the provision known as “accelerated depreciation.” Accelerated depreciation lets firms write off the cost of buildings and equipment much faster than they actually wear out. Thanks to this hurry-up write-off and other loopholes, GM paid just a 1.3% federal income-tax rate over those five years (2018-22) on over $34 billion in profits. 

(These savings were, naturally, not shared with auto workers, causing them to go on strike to obtain fair pay.)

Over that same period, General Motors paid Barra $125 million, or about a third as much as it paid in federal income taxes. Another leading BRT member is Lynn Good, CEO of Duke Energy, which over those same five years was given a $1.2 billion tax refund by the federal government despite almost $16 billion in profits. 

As of 2023, accelerated depreciation has begun to decelerate, forcing companies to write off a more realistic amount of their physical investments each year and therefore pay more in taxes. 

The other two provisions the BRT is trying to reverse restrict how much interest and research expenses corporations can deduct from their taxes. 

All three of these corporate tax hikes were included in 2017’s Trump-GOP tax law to help pay for much bigger corporate tax cuts: a two-fifths reduction (from 35% to 21%) in the corporate tax rate and the exclusion of a lot of the offshore profits of American companies from U.S. taxation. The hikes were made more palatable by delaying them: they’ve only come into effect in the last couple of years. The idea was always to repeal them before they became active. That didn’t happen and now corporations and their army of lobbyists are freaking out. 

But Congressional Republicans plan to ride to their rescue. Not only are they working to reverse the three provisions, they want to do it retroactively, so Corporate America would get back any extra taxes they paid while the more expensive rules were in effect. 

That shouldn’t happen. Nor should the 2017 law’s tax cuts mostly for the wealthy that are set to expire in a few years be permanently extended, as the GOP also hopes to do at a cost to us of $3.8 trillion in lost revenue and higher interest costs. Not even if the wealthy claim, as they always do, that it’s all for the greater good.