Think tank: 114 companies paid no current federal income tax but still aren’t biggest hit to deficit

Key Points:

• Over 700 profitable corporations paid an average of 10.4% in federal income taxes last year, less than half the statutory 21% rate, with 114 companies—including Tesla and Walt Disney—paying no federal income tax at all, according to a report by the Institute on Taxation and Economic Policy (ITEP).
• Corporate tax revenue has declined significantly under the Trump administration, dropping about 15% to $381 billion in fiscal year 2026, driven by tax cuts and breaks despite soaring corporate profits reaching a record $4.7 trillion.
• The biggest tax revenue losses stem from hundreds of corporations paying reduced rates rather than the smaller group paying zero taxes; these 706 companies saved $198 billion last year due to tax subsidies, highlighting the impact of reduced rates on federal revenue.
• Major tech companies like Alphabet, Microsoft, Amazon, and Meta have benefited most from tax breaks such as immediate expensing of R&D and bonus depreciation, with Meta facing scrutiny over its classification of AI data centers to claim R&D credits.
• While some experts argue that corporate tax breaks promote investment and economic growth, others warn that reduced corporate tax revenue contributes to the federal deficit and challenges government funding, sparking debate over the balance between competitiveness and fiscal responsibility.