Corporate Tax Avoidance in the First Five Years of the Trump Tax Law

The tax overhaul signed into law by former President Donald Trump in 2017 cut the federal corporate income tax rate from 35 percent to 21 percent, but during the first five years it has been in effect, most profitable corporations paid considerably less than that. This is mainly due to loopholes and special breaks that the 2017 tax law left in place and, in some cases, introduced. Corporate tax avoidance occurs because Congress allows it to occur, and the Trump tax law in many ways made it worse. The corporate minimum tax and expanded tax enforcement funding signed into law in 2022 by President Biden could begin to reduce corporate tax avoidance, as would other proposals from the White House that have not yet become law. This study examines federal corporate income taxes paid by the largest profitable corporations from 2018 through 2022. Because the corporations included in this study were profitable each year for all five of those years, one would reasonably expect that they would pay significant taxes. But in many cases, they did not.