The Price of Zero
The 55 Corporations That Paid Zero in Federal Income Taxes Spent $450 Million on Political Spending
Key Findings
- The 55 corporations that paid no federal corporate income tax in 2020 spent nearly $450 million on lobbying and campaign contributions over the last three election cycles. This total includes $408 million in lobbying and $42 million in campaign contributions.
- FedEx spent the most of any company ($71 million) followed by Charter Communications ($64 million), American Electric Power ($42 million), Duke Energy ($37 million) and Textron ($22 million).
- On average each year, these companies together have sent 526 lobbyists to influence the federal government.
- The companies contributed $4 million to the four national party committees and another $650,000 to the Senate Leadership Fund, a Republican super PAC.
- Of the top 25 recipients of money from the corporations that paid zero in taxes in Congress, 20 are Republicans. Each of these recipients voted for the Tax Cuts and Jobs Act of 2017, which lowered the corporate tax rate.
- Many of the companies also received huge rebates from the federal government in 2020. Four of the top 10 political spenders in 2020 could use their leftover rebate money to cover political spending costs for at least the next half century.
Introduction
According to the Institute on Taxation and Economic Policy (ITEP), at least 55 of the largest corporations in America paid no federal corporate income tax during the most recent fiscal year, 2020, on a combined $40.5 billion in pretax income.
Had these companies paid a tax rate of 21 percent – the current federal rate – they would have owed the federal government $8.5 billion. Twenty-one percent has been the rate since the passage of the Tax Cuts and Jobs Act in 2017. Prior to that, the corporate tax rate was 35 percent.
Not only did these companies not pay taxes, but nearly all also got money back from the government, receiving $3.5 billion in tax rebates, bringing the total 2020 tax giveaways for these 55 companies to $12 billion.
ITEP’s report does an excellent job explaining the policy details behind why many of these companies were able to avoid paying taxes. For example, companies game loopholes and write-offs like those for stock options, accelerated depreciation and maximizing special credits, such as those available for the energy sector.
This analysis looks past the “how” of such successful corporate tax dodging and at an important “why”: political spending to influence tax policy and law.
Our analysis found that from the 2016 election cycle through the 2020 cycle, these companies have spent nearly $450 million on lobbying and campaign contributions, according to data analyzed by Public Citizen obtained from The Center for Responsive Politics (www.OpenSecrets.org).
We highlight the companies that spent the most money on lobbying, hired the most lobbyists, lobbied specifically on tax issues, and filled the coffers of our nation’s elected officials with campaign cash.
Doing so reveals a familiar cycle in Washington, D.C. – one in which a relatively minimal investment in political spending can reap huge rewards for some of the country’s most profitable corporations.
The Price of Zero: $450 Million in Political Spending
The 55 companies that avoided taxation altogether in 2020 spent a staggering $450 million on political spending in the past three election cycles. It was a wise investment. Those companies saved $12 billion compared to how much they would have paid if their profits were taxed at the statutory rate.
Along with lobbying data, Public Citizen analyzed company PAC contributions as well as – in a limited number of cases – contributions from the company itself, to members of congress, federal candidates, party committees and outside groups trying to influence elections.
We found that these companies had plenty of money to spend on influencing policy and campaigns around the same time they paid zero in corporate federal tax.
FedEx spent the most of any company in this analysis, spending $71 million on lobbying and campaign contributions from the 2016 election cycle through the 2020 cycle (years 2015 through 2020). FedEx is followed by Charter Communications ($64 million), American Electric Power ($42 million), Duke Energy ($37 million) and Textron ($22 million).
The table below includes the top 25 political spenders that paid zero in federal corporate income taxes. For a full list of the political spending of all 55 companies included in ITEP’s analysis, see the Appendix.
Table I: Top 25 Political Spending Companies
(Includes lobbying and contributions from 2015 through 2020)
| Rank | Company Name | 2020 Pretax Income | 2020 Taxes Avoided | 2020 Rebate | Campaign Contributions 2016 - 2020 Cycles | Lobbying Spending 2016 - 2020 Cycles | Total Political Spending 2016 - 2020 Cycles |
|---|---|---|---|---|---|---|---|
| 1 | FedEx | $1,218 million | $256 million | $230 million | $5,521,271 | $65,930,835 | $71,452,106 |
| 2 | Charter Communications | $3,680 million | $773 million | $7 million | $6,480,764 | $57,330,000 | $63,810,764 |
| 3 | American Electric Power | $2,163 million | $454 million | $138 million | $817,925 | $41,189,496 | $42,007,421 |
| 4 | Duke Energy | $826 million | $173 million | $281 million | $3,359,650 | $34,113,697 | $37,473,347 |
| 5 | Textron | $278 million | $58 million | $1 million | $1,681,070 | $20,590,000 | $22,271,070 |
| 6 | FirstEnergy | $1,108 million | $233 million | $14 million | $3,272,054 | $13,108,281 | $16,380,335 |
| 7 | Nucor | $1,220 million | $256 million | $177 million | $1,238,743 | $12,570,000 | $13,808,743 |
| 8 | HP | $861 million | $181 million | $24 million | $224,000 | $12,789,000 | $13,013,000 |
| 9 | Dish Network | $2,532 million | $532 million | $231 million | $1,396,390 | $11,480,000 | $12,876,390 |
| 10 | Archer Daniels Midland | $438 million | $92 million | $164 million | $949,794 | $11,720,000 | $12,669,794 |
| 11 | Xcel Energy | $1,465 million | $308 million | $13 million | $1,342,250 | $10,270,000 | $11,612,250 |
| 12 | Salesforce.com | $2,630 million | $552 million | $12 million | $206,004 | $10,110,000 | $10,316,004 |
| 13 | Ecolab | $95 million | $20 million | $50 million | $1,207,250 | $7,570,000 | $8,777,250 |
| 14 | Lincoln National | $423 million | $89 million | $61 million | $465,500 | $8,270,000 | $8,735,500 |
| 15 | Nike | $2,873 million | $603 million | $109 million | $766,505 | $7,495,000 | $8,261,505 |
| 16 | CMS Energy | $885 million | $186 million | $35 million | $956,600 | $7,200,000 | $8,156,600 |
| 17 | Advanced Micro Devices | $1,208 million | $254 million | $20,500 | $7,710,000 | $7,730,500 | |
| 18 | Williams | $278 million | $58 million | $29 million | $1,551,250 | $5,775,000 | $7,326,250 |
| 19 | DTE Energy | $1,531 million | $322 million | $247 million | $1,620,900 | $5,470,000 | $7,090,900 |
| 20 | Ball | $193 million | $41 million | $33 million | $986,500 | $5,562,180 | $6,548,680 |
| 21 | Consolidated Edison | $1,227 million | $258 million | $2 million | $37,500 | $6,070,000 | $6,107,500 |
| 22 | Unum Group | $923 million | $194 million | $98 million | $1,255,500 | $4,138,000 | $5,393,500 |
| 23 | Jacobs Engineering Group | $213 million | $45 million | $37 million | $1,328,620 | $3,073,000 | $4,401,620 |
| 24 | Telephone & Data Systems | $284 million | $60 million | $175 million | $780,050 | $3,372,745 | $4,152,795 |
| 25 | Voya Financial | $195 million | $41 million | $9 million | $491,000 | $3,640,000 | $4,131,000 |
Source: ITEP’s 55 Corporations Paid $0 in Federal Taxes on 2020 Profits and Public Citizen’s analysis of Center for Responsive Politics Data (OpenSecrets.org).
Looking at just the 2020 election cycle, the list of top political spenders remains largely the same. Charter Communications spent the most ($24 million), followed by FedEx ($22 million), American Electric Power ($16 million) and Duke Energy ($10 million).
The 55 Companies Spent $408 Million on Lobbying and Sent 526 Lobbyists to Capitol Hill Each Year on Average
From 2015 through 2020, the 55 companies that paid zero in federal corporate taxes in 2020 spent a combined $408 million on lobbying the federal government. Altogether, these companies sent an average of 526 lobbyists to influence the federal government each year.
The lobbying spending and average number of lobbyists totals include lobbying on all issues. While we do not know the amount of money each company spent lobbying on a specific issue (unless a company lobbied on just one issue, which is rare), federal disclosures do reveal many of the issues and bills a company lobbied on.
According to the Center for Responsive Politics, during the time covered in this analysis – from the 2015 through 2020 – 47 of the 55 companies reported spending money on lobbying at some point.
Of the 47 companies that disclosed having lobbied, 35 reported they lobbied specifically on tax issues. Twenty-two companies lobbied on the Tax Cuts and Jobs Act of 2017 (TCJA), a bill that lowered the corporate tax rate.
Twelve companies spent more than $10 million on lobbying, all lobbied on taxes. FedEx, spent more than $71 million on lobbying from 2015 through 2020, the most of any company covered in this analysis. Five companies have spent more than $20 million over that time. FedEx is followed by Charter Communications ($57 million), American Electric Power ($41 million), Duke Energy ($34 million) and Textron ($21 million). [Table II]
Table II: Twelve Companies Spending More Than $10 Million on Lobbying
(Includes lobbying from 2015 through 2020. Lobbying totals and average number of lobbyists includes lobbying on all issues)
| Company Name | Total Lobbying Spending 2015 - 2020 | Average Number of Lobbyists Hired Each Year 2015 - 2020 | Lobbied on The Tax Cuts and Jobs Act | Lobbied on Tax Issues | 2020 Rebate |
|---|---|---|---|---|---|
| FedEx | $65,930,835 | 58 | Yes | Yes | $230 million |
| Charter Communications | $57,330,000 | 58 | Yes | Yes | $7 million |
| American Electric Power | $41,189,496 | 7 | Yes | Yes | $138 million |
| Duke Energy | $34,113,697 | 37 | Yes | Yes | $281 million |
| Textron | $20,590,000 | 17 | Yes | Yes | $1 million |
| FirstEnergy | $13,108,281 | 17 | Yes | Yes | $14 million |
| HP | $12,789,000 | 19 | Yes | Yes | $24 million |
| Nucor | $12,570,000 | 10 | Yes | Yes | $177 million |
| Archer Daniels Midland | $11,720,000 | 5 | Yes | $164 million | |
| Dish Network | $11,480,000 | 29 | Yes | $231 million | |
| Xcel Energy | $10,270,000 | 17 | Yes | Yes | $13 million |
| Salesforce.com | $10,110,000 | 18 | Yes | Yes | $12 million |
Source: ITEP’s 55 Corporations Paid $0 in Federal Taxes on 2020 Profits and Public Citizen’s analysis of Center for Responsive Politics Data (OpenSecrets.org).
On average, FedEx and Charter sent the most lobbyists to Capitol Hill each year, 58. They are followed by Duke Energy (37), Nike (35) and Dish Network (29).
The 55 Companies Spent $42 Million on Political Contributions
Most of the 55 companies have PACs from which they spend money on political causes. They use these PACs to fund the campaigns of elected officials and new candidates for office, as well as party committees and outside groups. In some cases, the company itself, not the PAC, is responsible for the giving. For example, FirstEnergy Corporation gave $1.3 million to the Cleveland Host Committee for the 2016 Republican National Convention.
From the 2016 election cycle through the 2020 cycle, these companies have contributed $42 million. The top campaign contributors include many of the same companies at the top of the list in terms of lobbying spending.
Fourteen of the 55 companies have contributed more than $1 million. Charter Communications spent the most, $6.5 million, followed by FedEx ($5.5 million), Duke Energy ($3.4 million), and FirstEnergy ($3.3 million). [Table III]
Table III: Companies Spending More Than $1 Million on Political Contributions
(Includes contributions from the 2016 cycle through 2020)
| Company Name | Campaign Contributions 2016 - 2020 Cycles |
|---|---|
| Charter Communications | $6,480,764 |
| FedEx | $5,521,271 |
| Duke Energy | $3,359,650 |
| FirstEnergy | $3,272,054 |
| Textron | $1,681,070 |
| DTE Energy | $1,620,900 |
| Williams | $1,551,250 |
| Dish Network | $1,396,390 |
| Xcel Energy | $1,342,250 |
| PPL | $1,329,000 |
| Jacobs Engineering Group | $1,328,620 |
| Unum Group | $1,255,500 |
| Nucor | $1,238,743 |
| Ecolab | $1,207,250 |
Source: Public Citizen’s analysis of Center for Responsive Politics Data (OpenSecrets.org).
The top recipients are the four national party committees, the 2016 Republican National Convention Host Committee and a Republican party aligned super PAC, which makes sense, as these committees can accept unlimited amounts compared to the campaign committees and leadership PACs of elected officials.
The National Republican Senatorial Committee (NRSC) has hauled in the most from the companies paying zero in taxes, $1.3 million, from the 2016 cycle through 2020. The NRSC is followed by the Cleveland Host Committee for the 2016 Republican National Convention ($1.3 million), the National Republican Congressional Committee ($1.2 million), the Democratic Senatorial Campaign Committee ($783,000), the Democratic Congressional Campaign Committee ($662,000) and the Senate Leadership Fund ($650,000).
The Senate Leadership Fund is a super PAC closely aligned with the Republican U.S. Senate leadership. All of the money contributed to the super PAC came from just two contributions, one from the Penske Corporation of $500,000 and another from Duke Energy of $150,000.
The current elected officials that have received the most from the 55 companies paying zero in taxes include many of the most powerful members of Congress. House Majority Leader Rep. Steny Hoyer (D-Md.) has received the most, $408,500. Hoyer is followed by House Minority Whip Rep. Steve Scalise (R-La.), House Minority Leader Rep. Kevin McCarthy (R-Calif.), House Majority Whip Rep. James Clyburn (D-S.C.) and Rep. Kevin Brady (R-Texas), who sponsored the Tax Cuts and Jobs Act in the House.[3]
Twenty of the top 25 recipients are Republicans. All of them voted for the Tax Cuts and Jobs Act of 2017 (TCJA), which among other things, lowered the corporate tax rate to 21 percent and expanded tax breaks that have allowed some of these companies to pay zero in federal corporate income taxes 2020. All five Democrats in the top 25 voted against the TCJA. [Table IV]
Table IV: Top 25 Members of Congress by Total Money Received From the 55 Companies Paying Zero in Taxes
(Includes contributions from the 2016 cycle through 2020)
| Recipient | Campaign Contributions from the 55 Companies 2016 - 2020 Cycles | Vote on The Tax Cuts and Jobs Act of 2017 |
|---|---|---|
| Rep. Steny Hoyer (D – Md.) | $408,500 | Nay |
| Rep. Steve Scalise (R – La.) | $405,300 | Yea |
| Rep. Kevin McCarthy (R – Calif.) | $382,500 | Yea |
| Rep. James Clyburn (D – S.C.) | $365,400 | Nay |
| Rep. Kevin Brady (R – Tex.) | $317,850 | Yea |
| Rep. Fred Upton (R – Mich.) | $282,500 | Yea |
| Sen. John Thune (R – S.D.) | $278,749 | Yea |
| Sen. Mitch McConnell (R – Ky.) | $265,750 | Yea |
| Sen. Chuck Schumer (D – N.Y.) | $255,500 | Nay |
| Sen. John Barrasso (R – Wyo.) | $239,750 | Yea |
| Sen. John Cornyn (R – Tex.) | $239,207 | Yea |
| Sen. Roy Blunt (R – Mo.) | $232,000 | Yea |
| Sen. Rob Portman Rob (R – Ohio) | $213,000 | Yea |
| Rep. Richard Neal (D – Mass.) | $210,500 | Nay |
| Sen. Gary Peters (D – Mich.) | $206,000 | Nay |
| Sen. Shelley Moore Capito (R – W.Va.) | $206,000 | Yea |
| Rep. Cathy McMorris Rodgers (R – Wash.) | $201,120 | Yea |
| Rep. Bill Johnson (R – Ohio) | $199,500 | Yea |
| Sen. James Inhofe (R – Okla.) | $199,500 | Yea |
| Rep. Robert Latta (R – Ohio) | $194,800 | Yea |
| Rep. Richard Hudson (R – N.C.) | $185,200 | Yea |
| Sen. Jerry Moran (R – Kans.) | $184,554 | Yea |
| Rep. Patrick McHenry (R – N.C.) | $180,500 | Yea |
| Sen. Marsha Blackburn (R – Tenn.) | $179,500 | Yea |
| Sen. Lisa Murkowski (R – Alaska) | $177,741 | Yea |
Source: Public Citizen’s analysis of Center for Responsive Politics Data (OpenSecrets.org).
Paying for Itself: Most Companies Received a 2020 Rebate Far in Excess of Their 2020 Cycle Spending. The Rebates Alone Could Fund Their Political Spending for Decades
ITEP’s analysis found that not only did the 55 companies not pay any federal corporate income tax, they also received money back from the federal government, to the tune of $3.5 billion in tax rebates. This total is far more than the $450 million in political spending covered in this analysis.
Looking at just the 2020 cycle, the rebates received by these companies were in excess of their political spending by more than $3.3 billion (the companies spent $151 million on political spending during the 2020 cycle).
To add some context to just how much the rebates outpace their political spending, if FedEx continued to spend at it the same level it did during the 2020 cycle in future cycles, its leftover 2020 tax rebate money could cover its political spending for the next nine election cycles (18 years).
It is not as though FedEx is a reluctant political spender, either. The company spent $22 million during the 2020 cycle, the second most of any company covered in this analysis.
American Electric Power, the company that spent the third most in 2020 ($16 million), could cover the next seven election cycles (14 years) worth of political spending with its leftover 2020 rebate money.
In total, 34 of the 55 companies could use their 2020 surplus tax rebate money to fund their political spending for at least the next decade.
Four companies in the top 10 in 2020 political spending could use their leftover rebate money to fund their political spending for more than the next half-century: The Dish Network could cover its political spending with its surplus 2020 rebate cash for the next 49 cycles (98 years), Nucor could cover its political spending for the next 40 cycles (80 years), Archer Daniel Midland could cover the next 37 cycles (74 years), and Duke Energy could cover the next 26 cycles (52 years).
Conclusion
The lobbying, campaign contributions and tax avoidance by these 55 companies is a never-ending cycle in which the companies spend to win tax breaks, then use the money saved from those breaks to try to get more. The corporations keep winning while the American public loses.
By the time Uncle Sam comes calling around tax time, these corporations have used every break and loophole on the books to ensure their pockets have nothing left but lint. But when it is time to influence federal policy, they find a whole bunch of money under the mattress. Adding insult to injury, the federal government shovels money back out to these companies that pay zero in corporate taxes in the form of rebates, money they can turn around and spend to influence policy for decades to come.