In 2025, Tesla reported $5.7 billion in U.S. profits. The company paid absolutely nothing in federal taxes.
To achieve this remarkable result, Tesla took advantage of several corporate tax breaks expanded or made permanent last summer as part of President Trump’s One Big Beautiful Bill (OBBB) — 100% bonus depreciation and immediate R&D expensing. It also generated savings by exploiting a long-standing deduction for executive stock options.
Tesla is not an anomaly.
So far, 88 profitable corporations have reported paying $0 in federal income taxes last year, according to a new report by the Institute for Taxation and Economic Policy (ITEP). The list includes Citigroup ($4.45 billion in profits)
CVS Health ($6.57 billion)
GoDaddy ($981 million)
Palantir ($1.58 billion)
PayPal ($1.43 billion)
Walt Disney ($8.3 billion)
Yum Brands, the parent company of KFC, Pizza Hut, and Taco Bell, ($1.03 billion).
The statutory tax rate on corporate profits is 21%. Collectively, the 88 companies in the ITEP report reported $105 billion in profits in 2025. That means, absent special breaks, they would have owed the federal government about $22.1 billion. Instead, these companies collectively “received $4.7 billion in tax rebates.”
While the statutory rate has remained unchanged since 2018, effective rates have continued to plummet due to a growing list of new tax breaks and loopholes. The effective tax rate paid by the average profitable corporation has fallen from 38% in the 1960s to 22% before Trump’s first term, and to about 12.8% after Trump’s first tax cut was passed in 2018.
When corporations pay less in taxes, the benefits flow to shareholders — who are overwhelmingly wealthy and, increasingly, foreign. A stock in a corporation that pays little to no taxes on its profits is more valuable. In the United States, 58% of corporate stocks are owned by the richest 5% of households. Overall, 40% of stock in American corporations is owned by citizens of other countries. We are reducing tax revenue that could be used to benefit Americans to further enrich wealthy foreigners.
