A report by the Institute on Taxation and Economic Policy finds that 88 major U.S. corporations, including Tesla, Walt Disney and Citigroup, paid no federal income tax in 2025 despite generating more than $105 billion in U.S. profits, highlighting a widening gap between statutory tax rates and actual corporate payments.
The analysis, released April 14 and based on Securities and Exchange Commission filings, arrives as the U.S. Department of the Treasury reported a 14.7% decline in corporate income tax receipts for 2025, even as overall federal revenue increased 6%. The divergence underscores how corporate tax contributions are shrinking relative to broader fiscal inflows.
At the statutory 21% rate, the companies identified would have owed roughly $22.1 billion. Instead, they collectively received $4.7 billion in rebates, producing a total tax advantage of $26.7 billion when compared with baseline obligations.
Key figures outlined in the report include:
- 88 companies paying zero federal income tax
- $105 billion in combined U.S. profits
- $22.1 billion estimated tax liability at statutory rate
- $4.7 billion in tax rebates received
- $26.7 billion total tax breaks relative to statutory baseline
The findings reflect a structural shift in corporate taxation. In the 1950s, corporate income taxes accounted for nearly one-third of federal revenue. By 2025, that share had fallen to 8.6%, with projections suggesting a further decline to around 7%.
According to ITEP Senior Fellow Matthew Gardner and analyst Spandan Marasini, the outcome stems from legal provisions embedded in the tax code rather than violations of law. Companies leveraged a combination of deductions, credits and accelerated write-offs to reduce taxable income to zero.
One of the most widely used tools was accelerated depreciation under the "One Big Beautiful Bill Act," signed by Donald Trump on July 4, 2025. The provision allows companies to immediately expense capital investments, cutting at least $11.4 billion from corporate tax liabilities among the firms studied.
Additional reductions came from expanded research and development expensing rules, which were applied retroactively to January 2025. More than 30 companies used this mechanism to lower tax bills by at least $4.4 billion, turning what is typically designed as an incentive into what analysts describe as a windfall.
Among individual companies:
- Tesla reported $5.7 billion in U.S. income and paid zero federal tax
- Disney reported $8.3 billion in profits with no federal tax liability
- CVS Health posted $6.57 billion in profits without paying federal income tax
- Citigroup recorded $4.45 billion in income and owed nothing
Amy Hanauer, executive director of ITEP, said, "These findings are not isolated cases, they reflect systemic deficiencies in the corporate tax code," adding, "Without meaningful reform, profitable corporations will continue to pay less than their fair share."
The report situates these outcomes within a broader legislative trajectory. The effective corporate tax rate has declined from roughly 38% in the 1960s to about 12.8% following the 2017 Tax Cuts and Jobs Act, with the 2025 law accelerating that trend.
The legislation itself passed the Senate 51-50, with Vice President JD Vance casting the deciding vote, and is projected to reduce federal revenue by $4.46 trillion over a decade while increasing national debt by approximately $3 trillion.
The fiscal impact is already visible. Treasury data shows a 28% drop in corporate tax collections in the first half of fiscal 2026 compared with the same period a year earlier, a decline officials attribute directly to provisions in the new law.
