New ITEP Study: Major Corporations Paid Lowest Federal Tax Rate in Decades Following Trump Tax Cuts

The nation’s largest and most profitable corporations paid an average federal income tax rate of just 10.4 percent in 2025, the lowest rate documented in more than four decades of research by the Institute on Taxation and Economic Policy (ITEP), according to a new study released today.

The study examines the current federal income taxes of 706 major U.S. corporations that collectively reported $1.88 trillion in domestic profits last year. Despite these enormous earnings, the companies collectively paid less than half the statutory federal corporate income tax rate of 21 percent, and 114 paid no current federal income tax at all.

The findings illustrate the combined effects of two rounds of corporate tax cuts enacted under President Trump: the 2017 tax law, which slashed the statutory corporate income tax rate from 35 to 21 percent, and the 2025 tax law, which expanded and made permanent lucrative corporate tax breaks.

Among the study’s key findings:

• 114 corporations paid no current federal income tax in 2025, including well-known companies such as Tesla, Walt Disney, CVS, Citigroup, United Airlines, and DoorDash.
• 258 corporations paid effective tax rates below 7 percent, or less than one-third of the statutory rate. Together, these companies reported $683 billion in U.S. profits but paid an effective federal income tax rate of just 1.7 percent.
• The 706 corporations studied received $198 billion in federal tax subsidies by paying less than the statutory 21 percent rate. They also benefited from an additional $263 billion in tax savings attributable to the 2017 reduction of the statutory rate from 35 percent to 21 percent.
• Just 25 corporations accounted for more than half of the 2025 tax subsidies. Alphabet ($18.9 billion), Microsoft ($18.7 billion), Amazon ($17.4 billion), and Meta ($13.9 billion) were among the largest beneficiaries.

“These findings show just how dramatically the corporate tax system has been tilted in favor of the nation’s wealthiest and most powerful companies,” said Matt Gardner, ITEP Senior Fellow and co-author of the report. “At a time when lawmakers claim the country cannot afford investments in families and communities, some of the most profitable corporations in American history are paying little or nothing in federal income taxes. This is not an accident. It is the predictable outcome of deliberate policy choices that have steadily eroded the corporate tax base.”

The study finds that corporate tax avoidance is particularly pronounced in several industries. Technology companies collectively paid an effective federal income tax rate of just 10 percent, receiving $68.5 billion in federal tax subsidies. Motor vehicle companies paid just 2.7 percent, while telecommunications companies paid 6.7 percent and aerospace companies paid 7.6 percent.

The research also documents how corporate tax breaks enacted or expanded in Trump’s 2025 tax law have helped some of the nation’s largest tech companies dramatically reduce their tax bills. Provisions allowing companies to immediately deduct investments in equipment and research have provided substantial benefits to corporations making massive investments in artificial intelligence and other technologies.

While these subsidies are frequently promoted as necessary to encourage investment, the report raises questions about why highly profitable corporations should receive billions of dollars in taxpayer subsidies for spending they may have undertaken regardless.

“Congress has repeatedly chosen to expand tax breaks for corporations that are already extraordinarily profitable,” said Steve Wamhoff, ITEP Federal Policy Director and co-author of the report. “Rather than continuing to subsidize corporate investments and reward aggressive tax avoidance, lawmakers should close these loopholes and ensure that large corporations pay a meaningful share of their profits in taxes.”

ITEP’s analysis draws on annual financial reports filed with the Securities and Exchange Commission by corporations in the Fortune 1000 or S&P 500. The study calculates effective federal income tax rates based on companies’ reported current federal income tax expense relative to their U.S. pretax profits.

The findings continue a series of corporate tax studies conducted by ITEP and Citizens for Tax Justice over more than four decades. The 10.4 percent effective rate in 2025 is even lower than the 11.2 percent rate documented in 1982 following President Reagan’s first round of corporate tax cuts, and the 11.3 percent rate reported in 2018 following Trump’s first tax law.