How Much Do Top Companies Pay in Taxes?

Last updated on June 2, 2023

Is it fair for companies to minimize their tax liability by using loopholes in the tax code in spite of the fact that they pay the highest tax rate in the world? That is the question that has led to the great debate about how much taxes large multinationals are evading using loopholes in the tax code and whether they should do it.

There have been arguments from both the sides with companies calling for the lowering of the corporate tax rate and the government trying to get the most in taxes. Individual taxpayers believe that companies must pay their share of taxes just as they do, and more so because they make millions in profits. Nasdaq  discusses further and shares the amount in taxes that top companies are actually paying.

“With memories of corporate greed and Great Recession bailouts still fresh in the minds of taxpayers, the myriad ‘revelations’ about corporate accounting practices that have emerged from inspection of quarterly financials have fuelled indignation as well as confusion among us little guys who feel as if we might be getting the short end of the stick.

“This all, of course, raises a number of very important questions — from how much large corporations really pay in taxes and how easy those numbers are to distort, all the way to what the ultimate taxpayer hierarchy should be between consumers and corporations.

“WalletHub attempted to shed some light on those issues by analyzing annual reports for the S&P 100 — the largest and most established companies on the stock market.  We compiled 2012 data on company profits, withholding practices, and tax payments on the state, federal, and international levels to determine effective and deferred tax rates for each business.

S&P 100 companies pay roughly 30% lower rates on international taxes than on U.S. taxes.

Tech companies — including Apple, eBay, and Google — paid up to 80% lower rates abroad.

Six S&P 100 companies are actually paying a negative overall tax rate and are therefore due a tax refund: Abbott Laboratories, Morgan Stanley, Bank of America, AIG, Bristol-Myers Squibb, and Verizon.

Among the remaining companies that owe taxes, Citigroup, Visa, AbbVie, and MetLife pay the lowest rates.

The average S&P 100 company pays a 14% higher tax rate than the top 3% of consumers.”

With the implementation of the Foreign Account Tax Compliance Act (FATCA), the IRS is making it difficult for companies to evade tax illegally, but to stop the evasion of taxes by exploiting the loopholes in the tax code; the overhauling of the tax code will be needed.