Donald Trump · Meta · Tesla · SEC · U.S. Treasury · Fortune Technology
Tesla and 113 other firms paid no current federal income tax, but they still aren’t the biggest threats to the federal deficit
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The effective corporate income tax rate is now the lowest it’s been in decades, and a tapering revenue source for the U.S. government is raising concerns among some policy experts.
Key facts
- The Congressional Budget Office projected President Donald Trump’s One Big Beautiful Bill Act (OBBBA) would add $3.4 trillion to the federal deficit over the next decade, a result of a $4.5 trillion
- Treasury Department data released earlier this month showed about a 15% reduction, about $70 billion, in corporate income tax revenue to $381 billion in the fiscal year that ended Sept. 30
- More than 700 profitable corporations paid 10.4% in current federal income taxes last year, according to a recent report from the Institute on Taxation and Economic Policy (ITEP), a progressive think
- Meta said it is one of the largest investors in R&D in the U.S., investing more than $200 billion over the past five years and $57 billion last year
Summary
More than 700 profitable corporations paid 10.4% in current federal income taxes last year, according to a recent report from the Institute on Taxation and Economic Policy (ITEP), a progressive think tank—less than half of the 21% statutory federal corporate income tax rate. ITEP calculated these tax rates based on analyses of annual financial reports filed to the Securities and Exchange Commission, and not IRS data, which lags behind SEC filings. Corporate tax revenue has plummeted under the Trump administration, which has ushered in a series of tax breaks meant to boost capital investments, even as corporate profits have soared. Diminishing corporate tax revenue has some policy experts concerned about a ballooning federal deficit and the U.S. government’s ability to fund itself.