The biggest, most profitable corporations in America paid an average federal income tax rate of 10.4% last year. That's less than half the 21% rate written in the law, and it's "the lowest effective rate that ITEP has uncovered in over 40 years of analyzing corporate income taxes," according to a new study from the Institute on Taxation and Economic Policy released October 22.
ITEP looked at 706 companies — members of the Fortune 1000 or the S&P 500 that were profitable in the U.S. Together, they reported $1.88 trillion in U.S. profits.
114 of them paid no federal income tax at all. Many actually got money back.
The study puts the blame on two Republican laws: Trump's 2017 tax law, and the budget bill Republicans passed and Trump signed in 2025, which made the 2017 breaks bigger and permanent.
Who paid nothing
Tesla reported $5.7 billion in U.S. profits in 2025 and paid exactly zero in federal income tax, ITEP found.
Other big names on the zero-tax list include Walt Disney, Citigroup, United Airlines, DoorDash, Coinbase, H&R Block and Kohl's. So did five defense contractors — Huntington-Ingalls, L3Harris, Parsons, Textron and V2X — companies that make their money from federal contracts paid for by your taxes, yet "didn't pay a dime" in federal income tax themselves.
In all, 258 corporations paid less than 7% — the 114 zero-tax companies among them. Together they reported $684 billion in U.S. profits and paid a rate of just 1.7%.
The biggest winners
All told, the 706 companies got $198 billion in tax breaks last year. Just 25 companies took more than half of it. At the top:
- Alphabet (Google): $19 billion
- Microsoft: $18.7 billion
- Amazon: $17.4 billion
- Meta (Facebook): $13.9 billion
That's on top of what they saved when Republicans cut the corporate rate from 35% to 21% in 2017.
How the 2025 budget bill did it
ITEP traced the biggest breaks to specific choices:
- Writing off equipment and buildings right away. The 2017 law expanded this; the 2025 budget bill made it permanent for equipment and some buildings. Depreciation breaks, including this one, cut corporate tax bills by at least $88 billion last year.
- Writing off research costs right away. The 2025 budget bill brought this back. It saved companies more than $37 billion.
- Looser limits on deducting interest, also loosened by the 2025 bill.
Those aren't loopholes the companies found by accident. "This is not an accident," ITEP's Matt Gardner said, calling it "the predictable outcome of deliberate policy choices." ITEP's Steve Wamhoff said, "Congress has repeatedly chosen to expand tax breaks for corporations that are already extraordinarily profitable."
Meanwhile
The same budget bill that handed these companies permanent tax breaks also cut Medicaid by nearly $1 trillion. And this isn't the first study to show where the money goes — we've reported how six companies got $83 billion in tax breaks in a single year, almost a fifth of what the government collects from every corporation combined.
What the study found
Under tax laws Republicans passed in 2017 and expanded in 2025, 706 of America's biggest profitable companies paid a 10.4% federal income tax rate in 2025 — the lowest ITEP has found in 40 years — on $1.88 trillion in profits. 114 paid nothing, including Tesla on $5.7 billion in U.S. profits, and the companies collected $198 billion in tax breaks, led by Alphabet, Microsoft, Amazon and Meta. The 2025 budget bill made the largest of those breaks permanent and revived another.
