Whirlpool Corporation has managed to lower its effective tax rate to zero percent, probably for years to come, thanks to generous tax credits for its Energy Star approved line of energy-saving appliances.
That means the appliance maker will be paying next to nothing on its $18 billion in sales and $619 million in earnings last year, according to The Wall Street Journal and Bloomberg News.
The company will be able to claim a production tax credit of as much as $225 for each washer and dryer it makes, $200 for each refrigerator, and $75 per dishwasher. Its rival, GE, can claim similar tax credits.
Not only that, but both Whirlpool and GE can stockpile such tax credits to be used in future years for two decades in the future.
While the tax credits may be encouraging more energy efficiency and conservation of natural resources, it’s coming at a big cost to the taxpayer. As Congress considers tax reform in a series of hearings this week and in future weeks, it may want to consider the example of the production tax credit and how it’s lowering corporate tax bills for some of the world’s biggest corporations to next to nothing.