Corporations paid 11.3 percent tax rate last year, in steep drop under President Trump's law

[demmiblue]

About 400 of America’s largest corporations paid an average federal tax rate of about 11 percent on their profits last year, roughly half the official rate established under President Trump’s 2017 tax law, according to a report released Monday.

The 2017 tax law lowered the U.S. corporate tax rate from 35 percent to 21 percent, but in practice large companies often pay far less than that due to deductions, tax breaks and other loopholes.

In the first year of the law, the actual amount corporations paid in federal taxes on their incomes — their so-called “effective rate” — was 11.3 percent on average, possibly its lowest level in more than three decades, according to a report by the Institute on Taxation and Economic Policy, a left-leaning think tank.

From 2008 to 2015, under the previous tax code, the corporations’ effective rate was about 21 percent, according to ITEP’s prior research.

The report also found that 91 corporations in the Fortune 500, many worth billions of dollars, paid no federal taxes last year.

The findings come amid an explosion in the federal deficit, which this year rose to close to $1 trillion. In October, the U.S. Treasury Department announced the deficit had grown $205 billion, or 26 percent, in the past year, an unusual occurrence during a period of strong economic growth.

https://www.washingtonpost.com/business/2019/12/16/corporations-paid-percent-tax-rate-last-year-steep-drop-under-president-trumps-law/

[at140]

1. and that is the single most important reason why Corporate

earnings have expanded in 2019. And that has caused stock market to keep going up in stratosphere.
But even with this gift of 40% reduction in marginal tax rates, and the jump in net profits because of it,
stocks are now as over-valued as they were in October 1929 just before the crash. With no more corporate tax cuts coming, corporate earnings will not see the jump in earnings in 2020.