Last week ITEP published a list of 88 profitable corporations that reported paying zero federal income taxes on their 2025 U.S. income, in no small part due to the corporate tax cuts pushed through by the Trump administration and a Republican Congress in 2017 and 2025. The report’s methodology is straightforward: it simply republishes a few data points the companies themselves disclose in their 10-K annual financial reports. Even so, a handful of observers took the opportunity to make halfhearted objections to our analysis.
By far the most common tactic for muddying these waters is pointing to a different data point in the company’s annual report, “cash income taxes paid, net of refunds received,” which is routinely larger than zero.
This objection falls squarely in a long tradition of corporate responses to this work that could best be summarized as “Squirrel!” That is, when confronted with the completely accurate observation that their own annual reports disclose an estimated current federal income tax expense of zero on current-year income, the companies will desperately point to something else entirely.
Sometimes it’s taxes they’ve paid in the past, or will pay in the future, or paid this year to some other country, or paid this year on income from a prior year. Anything, in other words, rather than admit that what we’ve said is factually correct. The argument being made is that even if current federal tax is zero, its worldwide cash income tax is not, meaning they wrote checks to some government somewhere in 2025.
But this is a non-sequitur. Current federal income tax expense is defined by the Financial Accounting Standards Board (FASB), the agency responsible for setting reporting standards in the 10-K, as “the estimated taxes payable or refundable on tax returns for the current year.” For each of the 88 companies in our recent report, current federal income tax expense as reported in their annual reports is zero — or less.
If any of these companies believe the estimate of their tax liability they published just months ago is now incorrect, then they should file an amended 10-K to inform the SEC and its shareholders.
Cash income tax, by contrast, is simply the cumulative value of the checks a company wrote during a fiscal year. Even in normal years, cash income tax payments don’t have to bear any connection to a company’s current-year income at all. And 2025 was emphatically not a normal year: any company that had substantial offshore holdings prior to the 2017 federal tax cut was required to pay a transition tax under a multi-year installment plan that wrapped up (for most companies) in 2025. A year from now when we’re looking at 2026 data, the overlap between cash income tax payments and current federal tax expense will likely be greater– although “current tax” will still be the clear apples-to-apples choice for evaluating federal taxes paid on current-year U.S. income and worldwide cash taxes paid will remain doubly irrelevant. For tax year 2025 in particular, cash income tax expense is pretty worthless as an indicator of how the U.S. tax system applied to a company’s income in that year. It’s understandable that these corporations would like Americans to look at a number that’s bigger than zero, but that doesn’t make it the right number.
The Washington Post’s editorial board took a different tack in its (indirect) critique of our analysis: rather than taking the topic-changing strategy favored by corporate leaders, the board instead went with the “perfectly legal” canard. The Post’s Tax Day editorial argues that the companies beating the federal tax system like a pinata last year are “just using the tools Congress gave them.”
There is some truth to this, as our report is careful to note: many of these companies’ tax savings are clearly attributable to tax breaks Congress has enacted or expanded in recent years at the behest of the Trump administration, especially bonus depreciation and the immediate expensing of research spending. As we have argued elsewhere, these provisions routinely fail to deliver the social benefits their proponents have promised: even if they’re legal now, some of these provisions probably shouldn’t be. Even so, the Post’s critique missed the mark, for two reasons.
First, these companies admit (again, because FASB requires them to) that they are claiming tax breaks they believe are illegal. The 88 companies profiled in our analysis collectively acknowledge that they claimed an astonishing $3.5 billion of “uncertain tax benefits,” tax breaks that the companies claimed on their 2025 tax returns but believe are more likely than not to be disallowed on audit—if an audit ever comes. These companies are demonstrably living in the grey areas of the tax law—much like the company founded by the Post’s owner, Jeff Bezos.
Second, the billions of dollars that were spent on lobbying Congress last year weren’t just buying flowers. Every year, corporate money flows like a mighty river through the halls of Congress in an effort to reshape the law—especially the tax law—to the advantage of these companies. The tax laws Congress enacts are, in large part, the laws business lobbies pay them to enact. The corporate tax cuts pushed through by a Republican Congress and President Trump in 2017 and 2025 were, in large part, exactly the policy changes big multinational corporations had been hawking for years.
In this moment, when the Trump administration is hobbling regulatory agencies as fast as it can, it feels like a minor miracle that the most profitable corporations in America are still legally required to tell their shareholders—and the American public—how much federal (and state) income tax they pay each year on their U.S. income. It’s a perennially useful barometer of the health of our corporate tax that has, on occasion, prompted lawmakers to make this important revenue source fairer and more sustainable. No wonder, then, that these companies want our leaders in Congress to think about something else.
