A study from the Washington, DC-based Institute on Taxation and Economic Policy (ITEP) examined 706 major firms, which reported a combined $1.88 trillion in US profits for 2025. Despite a statutory rate of 21%, these companies paid less than half that amount in federal income taxes. The analysis points to the 2017 Tax Cuts and Jobs Act and the subsequent One Big Beautiful Bill Act as the primary drivers of this erosion, noting that 114 companies in the study paid no federal income taxes at all.
In section Newsroom
US Corporate Tax Rates Hit Four-Decade Low
The largest American corporations paid an effective federal income tax rate of just 10.4% last year, the lowest level recorded in four decades of analysis. This trend follows Republican-led legislative changes that slashed statutory rates and cemented tax breaks while social programs faced significant funding reductions.
Among the companies reporting zero federal tax payments were Tesla, Walt Disney, CVS, Citigroup, United Airlines, and DoorDash. Furthermore, 258 corporations paid effective rates below 7%. ITEP senior fellow Matt Gardner described the findings as the predictable outcome of deliberate policy choices rather than an accident. While proponents argue that such subsidies drive investment, the report highlights that just 25 corporations, including Alphabet, Microsoft, Amazon, and Meta, captured over half of the $198 billion in federal tax subsidies identified by the study. Steve Wamhoff, ITEP’s federal policy director, urged lawmakers to close these loopholes rather than continue rewarding aggressive tax avoidance.
Comments (0)
No comments yet. Be the first!