Major U.S. Corporations Paid Only 10.4% Federal Tax Rate in 2025, Study Finds
A new Institute on Taxation and Economic Policy study shows that 706 large U.S. firms averaged a 10.4% federal income tax rate in 2025, the lowest in over four decades, with 114 companies paying nothing.
The Institute on Taxation and Economic Policy released a study indicating that the nation’s 706 most profitable corporations paid an average federal income tax rate of 10.4% in 2025, the lowest level recorded in more than 40 years. Collectively, these firms generated $1.88 trillion in U.S. profits but contributed less than half of the 21% statutory rate, with 114 companies—including Tesla, Walt Disney, CVS, Citigroup, United Airlines and DoorDash—reporting zero current tax liability.
Another 258 corporations paid effective rates under 7%, together earning $683 billion in profits while paying an effective 1.7% tax. The findings link the decline to the 2017 corporate tax overhaul and a 2025 law that expanded and solidified lucrative deductions, resulting in $198 billion in federal subsidies and an additional $263 billion in savings from the earlier rate cut. Alphabet, Microsoft, Amazon and Meta alone received more than half of the total subsidies. ITEP officials argue that the data demonstrates a tax system heavily tilted toward the wealthiest firms and call for closing loopholes to ensure a fairer share of profits is taxed.
Why it matters
The study shows how recent tax policies let the most profitable U.S. companies pay far less than the legal rate, raising questions about tax fairness and budget impacts.
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