The Institute on Taxation and Economic Policy (ITEP) found that 114 profitable U.S. corporations paid no current federal income tax in 2025. Its analysis examines corporate payments, tax breaks and profits across a much larger group of companies.
The ITEP Report covered 706 companies in the Fortune 1000 or S&P 500 that were profitable in the United States and disclosed enough information for shareholders to assess their tax rates. Those companies reported $1.88 trillion in U.S. profits and paid $196 billion in current federal taxes.
The institute relied on corporate annual financial reports, rather than IRS data, which it said lagged behind Securities and Exchange Commission filings. The report was written by Matthew Gardner, Steve Wamhoff, Joe Hughes and Spandan Marasini.
The zero-payment list includes Tesla, Walt Disney, CVS, Citigroup, United Airlines, Palantir and DoorDash. Company profits reported alongside the findings included $4.4 billion for Citigroup, $8 billion for CVS Health and $5.5 billion for Duke Energy.
Tesla reported $5.7 billion in profits, United Airlines $4.3 billion and Walt Disney $8.3 billion. The figures describe profits alongside current federal tax payments, not a company’s entire tax bill across all jurisdictions.
The sample’s 10.4% rate fell well below the 21% statutory rate
| Measure | ITEP finding |
|---|---|
| Companies in the analysis | 706 |
| U.S. profits reported | $1.88 trillion |
| Current federal taxes paid | $196 billion |
| Aggregate effective rate | 10.4% |
| Companies paying below 7% | More than 250 |
ITEP said the sample’s 10.4% effective rate was the lowest it had identified in more than 40 years of studying corporate taxes. That was less than half the statutory rate of 21%.
The institute also found that more than 250 companies in the sample paid at rates below 7%. The zero-payment companies were one part of a wider pattern of lower payments, Gardner argued.
Tax breaks accounted for $198 billion in the report’s calculations
ITEP counted $198 billion in corporate tax subsidies across the 706 firms. It defined a subsidy as a provision that lets a profitable company pay less than the official 21% rate.
Twenty-five corporations accounted for more than half of the identified subsidies. Meta, Amazon, Microsoft and Alphabet each received between $13 billion and $19 billion in tax benefits, according to the analysis.
The four largest beneficiaries saved a combined $46 billion through immediate expensing of domestic research and development costs and 100% bonus depreciation for qualifying business property acquired after January 2025. ITEP separately calculated that the same four companies saved another $263 billion from the 2017 reduction in the corporate rate.
The report compared the sample’s actual payments with two hypothetical rates. At the former 35% rate, the companies would have paid $657 billion; at 21%, they would have owed $394 billion.
The 2017 and 2025 laws kept the corporate rate at 21%
The 2017 Tax Cuts and Jobs Act lowered the federal corporate rate from 35% to 21%. The One Big Beautiful Bill Act, or OBBBA, passed last July, extended the 21% rate, made several tax breaks permanent and added others.
The 2025 law was the first second-term Trump tax law to take effect. Its new provisions included immediate expensing for domestic research and development and full bonus depreciation for qualifying property acquired after January 2025.
Tax-policy analysts disagree over whether 21% is too low
Gardner, an ITEP senior fellow and report coauthor, said the broader concentration of profits and reduced rates posed a larger revenue issue than the companies paying nothing. He also argued that the current rate is too low, comparing it with the 37% top rate for American workers.
“There's a real concentration of profits at the top, and when those companies pay anything less than 21%, that's really what is knocking a hole in our corporate tax laws right now,” Gardner said.
Kyle Pomerleau, a senior fellow at the libertarian American Enterprise Institute, defended a lower rate. He said the former 35% rate “was the highest or third-highest in the world, depending on how you count it,” and added, “Having a rate that is more in the middle of the pack at 21%, that's good”.
Garrett Watson, vice president of federal tax policy at the nonpartisan Tax Foundation, said the 2017 law aimed to improve U.S. competitiveness and encourage investment. Supporters of the tax cuts also argue that Congress broadened the tax base and curtailed deductions to offset lower rates, and that the changes supported investment and growth.
Gardner said the amount of lost collections added up even in a difficult budget environment. “And this report documents $198 billion worth of problems in 2025,” he said.
Corporate tax receipts fell as profits climbed
Treasury Department data released in October 2026 showed corporate income tax revenue of $381 billion for the fiscal year ended Sept. 30, a drop of about $70 billion, or 15%. The decline formed part of a reduction of more than 25% since 2024.
The Congressional Budget Office projected that OBBBA would add $3.4 trillion to the federal deficit over the next decade. The projection includes a $4.5 trillion reduction in revenue, partly offset by a $1.1 trillion reduction in spending.
Corporate profits moved in the opposite direction. They reached a record $4.7 trillion over the 12 months through mid-2026, up 17% from the preceding 12-month period.
ITEP used company filings, while the DNC framed the finding politically
The Democratic National Committee cited the issue in an October 29, 2026 statement ahead of the midterms. Deputy Communications Director Kendall Witmer said, “Donald Trump's presidency has been a boon for billionaires and big corporations, while working families can't make ends meet.”
The DNC release described 100 of the most profitable corporations as paying nothing in taxes for the year. ITEP’s analysis counted 114 companies with no current federal payment. Gardner’s report also said the 21% rate itself, not only the firms at zero, shaped the overall total.
