The effective tax rate of profitable large corporations plummeted from as high as 16 percent in 2014 to as low as 9 percent in 2018 after passage of the Tax Cuts and Jobs Act (TCJA) of 2017, the Government Accountability Office reported.

Defining “large corporations” as those that filed IRS Schedule M-3, which is required for corporations with $10 million or more in assets, the GAO also found that about half of all large corporations had no tax liability each year from 2014 to 2018. In addition, 25 percent of profitable large corporations had no tax liability in that period.

“Corporations may have no federal income tax liability for a number of reasons,” such as unprofitability, or losses or credits from other years that can be used to offset current-year tax liabilities, the report noted. “Among large corporations, from 2014 through 2018, an average of approximately 44 percent reported a loss in a given year.”

Despite the decrease in effective tax rates in 2018, total tax liability among profitable large corporations was slightly higher in both 2017 ($278 billion) and 2018 ($267 billion) than it was in 2016 ($262 billion), the report found. The GAO attributed this higher tax liability to other provisions of the TCJA, which increased the taxation of foreign-sourced income and led to increased repatriations of income previously held offshore.

From 2008 to 2012, between 18 percent and 24 percent of all profitable large corporations had no federal income tax liability, the GAO stated.

The report pointed out how the TCJA reduced the statutory corporate tax rates from between from 15 percent to 35 percent to a standard rate of 21 on net corporate income, and that it made substantial changes to how U.S. corporations’ international activities were taxed.

“Republicans made it shockingly easy for profitable corporations to wave a magic wand and eliminate their tax liability,” U.S. Sen. Ron Wyden (D-Ore.), chair of the Senate Committee on Finance, said in a statement. “That’s why Democrats passed a new 15 percent minimum tax in the Inflation Reduction Act. Beginning to crack down on this obvious unfairness with a minimum tax is a policy the American people overwhelmingly support."