Major American Companies Pay Lowest Federal Tax Rate in Four Decades

Washington, Thursday, 22 October 2026.
A study by the Institute on Taxation and Economic Policy reveals that 706 major U.S. corporations paid an average effective federal income tax rate of just 10.4% on $1.88 trillion in domestic profits in 2025. Marking the lowest level recorded in over 40 years of research, this rate is less than half the statutory 21% tax rate. Driven by expanded legislative incentives, corporate tax subsidies reached $198 billion, enabling 114 highly profitable firms to pay zero federal income tax. These findings underscore a significant shift in corporate taxation and federal revenue collection.