In 2025, Meta paid an effective federal tax rate of 3.5%

You don't need a startup. Millions of people have an effective tax rate that is 0% and they have a net tax rate that is negative. They do this simply by having no meaningful skills or knowledge.

TiredOfLife• 5 months ago

You can make stuff up even on this site.

swiftcoder• 5 months ago

It's called a "farm" (note the quotes). You may need a few acres of very cheap rural land, and some chickens. The IRS loves chickens

xnx2• 5 months ago

The IRS loves chickens

Or even just bees: https://mountainsweethoney.com/state-guide-for-beekeeper-tax...

hsuduebc24• 5 months ago

It’s starting to feel almost hilarious how much of comically evil villains they are.

I picture them as Robbie Rotten from LazyTown.

https://characterprofile.fandom.com/wiki/Robbie_Rotten

yoyohello132• 5 months ago

Maybe it’s just more visible now but it seems like these companies are really accelerating in their evil lately. Probably because they know this admin’s going to do jack shit to protect people. Would be funny if it wasn’t also so scary.

hsuduebc24• 5 months ago

I have the same observation. Not really sure what is the driver.

bilekas• 5 months ago

Maybe it’s just more visible now but it seems like these companies are really accelerating in their evil lately.

Well I mean they have no incentive to behave any other way, if anything they are rewarded via the shareholders. Number goes up when they perform mass layoffs. That tells you everything you need to know.

philipallstar4• 5 months ago

Trickle-down economics isn't just a hoax, it's corrosive to democracy.

It's a hoax in that it's a straw man that no one advocates for.

tgv• 5 months ago

You may read "supply-side economics" instead.

DauntingPear7• 5 months ago

The current admin sure does seem to push for it

nocoolnametom• 5 months ago

Perhaps, but the entire ecosystem of associated buzzwords/ideas is pretty popular in our culture today: "job creator" C-suite executives magically "create" jobs and/or raise pay because their budget for taxes goes down and they just don't know where else to put the cash, thus everyone benefits. Is it a straw man? Sure. Is it the same pablum often delivered by the evening news and politicians? Yes. Is reality a TON more complicated and often counter-intuitive? Yep. (Raising wages doesn't seem to have a _direct_ correlation to inflation, it's correlated but often lagging and muted in response; job creation seems to be mostly a market effect not corporate decision; the modern definition of "fiduciary duty" means extra cash should go toward immediate stockholder benefit so stock buybacks are always FAR more likely than employee benefits; etc; etc).

The one area I'd push back strong on is that nobody is "advocating" for it. Many stockholding orgs/individuals are. They don't care if its a straw man, they know what the real-world systemic effects are of lower taxation rates.

philipallstar4• 4 months ago

"job creator" C-suite executives magically "create" jobs and/or raise pay because their budget for taxes goes down and they just don't know where else to put the cash, thus everyone benefits.

The real concept, which is actually true, is business owners and managers and investors have money - whether risking money for a startup, or spending revenue from customers - and that money goes into investing in infrastructure and paying salaries, and paying taxes. Their taxes then pay for the public sector employees' jobs and all other public costs. That hierarchy is why making sure people want spend their time and money in your country, because it pays for everything else.

kelvinjps10• 5 months ago

Being pro businesses, it's only available for big corporations because as a self-employed, it's close to 30%.

candiddevmike3• 5 months ago

I'm SE and there are quite a few tax breaks available, especially if you structure as a S-Corp. The hard part is figuring out what all tax breaks are available as they're constantly changing, like last year you can deduct dental insurance premiums.

I still pay an eye watering amount, and being SE shows you the brutality of the system (estimated taxes are insane, especially the payment schedule for them when you're NET 30/60).

mindslight2• 5 months ago

estimated taxes are insane, especially the payment schedule for them when you're NET 30/60

Total layman understanding here, but can you not do cash basis plus schedule AI?

butterbomb2• 5 months ago

it's only available for big corporations because as a self-employed, it's close to 30%.

Well maybe instead of complaining you should simply just generate more economic value. If Meta disappeared tomorrow it would hit the US economy, if you disappeared tomorrow it wouldn’t even be noticeable in the stock market.

vjvjvjvjghv• 5 months ago

Sorry that’s a horrible take. Basically you are embracing “too big to fail”.

phendrenad2• 5 months ago

Conventional conservative/capitalist wisdom is that corporations "don't pay taxes" because they just "pass it along to consumers as higher prices". That's why the juxtaposition here, that they are spending tens of millions to influence elections, is important. If corporations were just efficient market operators that moved goods and services, why so much lobbying? It's because the rich owners of corporations realized that with a small tweak, which we know retroactively as "Citizens United vs FEC", they could harness their corporate ownership to control the political, social, and governance landscape of the world.

palmotea3• 5 months ago

Conventional conservative/capitalist wisdom is that corporations "don't pay taxes" because they just "pass it along to consumers as higher prices".

I'm with you, but a couple things: 1) Do you mean "shouldn't pay taxes"? Because I'm pretty sure their thing is getting corporations (and the wealthy) to pay less taxes than they already do. 2) That's not wisdom, it's a propaganda-meme. It's a misleading little story (mainly through omission) meant to get people to support a policy that's bad for them.

cl0ckt0wer• 5 months ago

individuals should be able to take advantage of the same tax rules as corporations.

anon291• 5 months ago

I mean you can. If you read the actual article:

https://itep.org/meta-tax-breaks-trump-mark-zuckerberg/

You just have to buy of equipment used for a business purpose that you can depreciate. You then put these on Form 4562 or something.

This is a bit tongue in cheek. The American tax system is set up to tax at the point of consumption. There'd be no difference in how much money actually ended up in your hand if we switched everything over to a VAT, except a lot of people would probably be relieved of the psychological burden of taxes.

oulipo2• 5 months ago

Well, we need taxes to have a functioning economy. So what is really needed is that we close loopholes that allow corporations to pay less than individuals

Taxes is a net benefit (at least here in Europe): you basically get better services (that you would pay anyway) for much cheaper: education, healthcare, culture, etc

palmotea3• 5 months ago

individuals should be able to take advantage of the same tax rules as corporations.

Nah, corporations should be taxed at the same rate as individuals. A country where everyone pays only 3% tax is going to be a crap hole.

randomtoast8• 5 months ago

The state would go bankrupt within a month or so.

shubhamjain2• 5 months ago

Where is this figure coming from? According to Meta's press release, the effective tax rate is 30% [1].

The full year 2025 provision for income taxes includes the effects of the implementation of the One Big Beautiful Bill Act during the third quarter of 2025. Absent the valuation allowance charge as of the enactment date, our full year 2025 effective tax rate would have decreased by 17 percentage points to 13%, compared to the reported effective tax rate of 30%.

[1] https://investor.atmeta.com/investor-news/press-release-deta...

randomtoast8• 5 months ago

That's why I often ask for "Source?" — because sometimes people seem to make up numbers. However, whenever I do this, I receive a large number of downvotes. Maybe it's not common on HN to back up claims with sources.

Taek• 5 months ago

It's more likely your attitude rather than your quest for verification that gets you downvotes.

jannyfer• 5 months ago

There is another possibility. “Source?” is a low effort comment, but GP’s is not.

abeppu2• 5 months ago

I think it's from this: https://itep.org/meta-tax-breaks-trump-mark-zuckerberg/

shubhamjain2• 5 months ago

The post seems to be comparing quarterly figures for tax with annual profit. The doc they cite clearly $25B as provision for income tax.

datsci_est_20155• 5 months ago

Interesting. Wouldn’t surprise me if there are different ways to report the same numbers to make the situation seem more or less favorable. Statisticians and accountants are both professional liars (speaking as a statistician married to an accountant).

datsci_est_20155• 5 months ago

Yeah this is a weird low quality submission to HN (no offense OP). Microblogging has questionable value for anything beyond “hot takes” and “breaking news” (and keeping people angry and misinformed enough to vote).

ovi256• 5 months ago

I bet the two sources won't agree on what values go into the denominator and / or numerator of their effective tax rate calculations. It can be as simple as the 3.5% being a calculated rate on revenue rather than profit

loeg14• 5 months ago

You can't just throw revenue in the denominator, though. Business tax is assessed on income. If you're going to make a claim about tax rate using an unconventional metric, you need to be explicit about what you've done; Reich isn't.

terminalshort3• 5 months ago

There is no real concept of sources legitimately disagreeing here. There is tax law, which Meta uses to calculate its tax liability, and then there are lies.

kccqzy• 5 months ago

Even if you mistakenly calculate the rate on revenue, you will get 25474/200966=13%.

kadabra9• 5 months ago

I'm shocked, absolutely shocked that a Bluesky post would be deliberately misleading to push a narrative that we need more taxes.

stetrain• 5 months ago

I don't know why that's specific to one social media network. I see deliberately misleading posts on all of them.

DoctorOetker• 5 months ago

If entity A declares such and such incomes and expenses, it could be truthful or not.

If entity A is truthfully declaring such and such incomes and expenses, why would it reference it's own declaration as the "reported effective tax rate of 30%".

On the other hand if A is not truthfully declaring such and such incomes and expenses, and a legal team is very careful in maintaining an exact wording towards the government, then any tax-related comments by A which are not made by the legal team would either be self-censored or censored by the legal team to never reference "the effective tax rate" but rather a "reported" one, it basically reads like a superscript referring the reader to some other carefully worded fine print in other documents.

What prevented the more natural language of "[...] compared to the effective tax rate of 30%." ? Under what circumstances would you add such a word?

EDIT: this is not to say that this word constitutes an effective admission of lying, but rather that they don't actually want to talk about it, while pretending to be openly talking about it.

EDIT2: whenever companies get away with substantially lower tax rates, employee shortages in the rest of the economy can be seen as low-effective-taxed companies "stealing" employees from the rest of the economy, perhaps with or without approval from the government. If the government approves it is effectively a state-sponsored enterprise, and if it doesn't it would probably like to know about it since productivity of the economy could be improved by reassigning those employees into companies that allow themselves to be properly taxed (whatever that means!)

SpicyLemonZest• 5 months ago

In the US, public companies generally must report their financial results according to generally accepted accounting principles (GAAP). They can also report other numbers, and that's what they're doing in footnote (1); they think one particular adjustment GAAP requires them to make might be misleading, and they helpfully disclose that they would have calculated 13% if not for that adjustment. But they are not allowed to say that the GAAP number is wrong or untruthful, nor to put the non-GAAP number in the topline and the GAAP adjustment in the footnote.

terminalshort3• 5 months ago

Taxes are a subject of frequent liberal conspiracy theories. You will see all sorts of blatantly false claims like this because left wing misinformation spreaders like Robert Reich make up their own tax calculations that have no relation whatsoever to actual tax law.

mrgoldenbrown• 5 months ago

No need to limit this to "liberal" conspiracy theories. Trump and his admin's statements on how tariffs and other taxes work and who pays them have been full of blatantly false claims.

TYPE_FASTER2• 5 months ago

The effective federal tax rate, and the amount of federal tax Meta paid as a percentage of income, are two different things.

More details here: https://itep.org/meta-tax-breaks-trump-mark-zuckerberg/

The 10-K filed by Meta is linked to in that article, and can be found here: https://www.sec.gov/ix?doc=/Archives/edgar/data/1326801/0001...

If you dig into the details in the Income Tax Disclosure block, Meta paid $2.8B in Federal income taxes for the year ended December 31, 2025.

Meta deferred a large chunk of Federal income taxes.

So, while the effective Federal income tax rate for 2025 was about 30%, largely due to a 3rd quarter charge of $14B against deferred taxes (Meta's effective tax rate for 2023 was 17.6% and for 2024 it was 11.8%), they paid 3.5% of their income as Federal income tax.

gruez• 5 months ago

Meta deferred a large chunk of Federal income taxes.

How are can we reasonably expect them to be deferred for? Are we talking on the order of years, or decades?

tacticalturtle• 5 months ago

Unless he links directly to evidence that backs up what he says, I’ve learned to tune out Robert Reich.

For a guy who is a Rhodes Scholar, a college professor, and a former Secretary of Labor he has a remarkable tendency to leave out qualifying context when making these statements.

He’s smart enough to formulate arguments with the appropriate context and still make it accessible to the general public - but he consistently chooses not to.

A few weeks ago he was trying to compare the “millionaire tax” of my home state of Massachusetts, with the proposed California wealth tax as evidence that the California tax would not cause flight of wealthy taxpayers:

https://www.facebook.com/RBReich/videos/what-really-happens-...

Never once did he mention that the Massachusetts tax is a bog standard conventional tax on income, compared to this new concept of a global total wealth tax.

ecshafer• 5 months ago

Lies, damned lies and statistics. They are fudging statistics so they arent technically lying but leave out context and stretch definitions to make their point.

1-6• 5 months ago

I wonder if tax returns of corporations could be made public data.

randomtoast8• 5 months ago

It could but then it would show that the effective tax was not 30% but 3% and there is a strong lobby in Washington against that.

loeg14• 5 months ago

You think public companies are just lying in their audited financial statements?

youknownothing• 5 months ago

As someone who ran his own business for over eight years paying close to 30% tax (and is soon going to do it again), I have very mixed feelings about companies using tricks to reduce their tax burden. I mean, I like it when I do it, and I feel justified because there isn't that much that I can claim tax relief from, but seeing a big company paying such low tax rate feels wrong (even though it may be completely legal).

Having said that, there is something to be said of all the tax that is indirectly being generated by Meta: they pay high salaries, and the people receiving those high salaries will pay a significant amount of income tax. Same for all the dividends that they pay out. Maybe just being a big money-mover is their excuse?

tossandthrow2• 5 months ago

It is easy to excuse paying taxes.

The issue that that taxes fundamentally bind two moralities: and individual and social one.

Societies generally thrive better when there is a certain level of equality. Not a hundred percent, but enough for social mobility and for people to be aspirational.

No or low taxes remove that opportunity. It bears people from taking an education and forces them in poverty.

ralph84• 5 months ago

Progressive taxation on income is specifically designed to prevent upward mobility from working.

thinkingtoilet• 5 months ago

You're acting like the game is fair. The game is heavily rigged to favor large companies. This is by design.

philipallstar4• 5 months ago

Meta is a company created in the last 20 years or so. You can make more big companies if you don't make it really difficult to do so.

overrun113• 5 months ago

Most small businesses are pass through entities in the United States and pay no corporate taxes at all so it's certainly not the case that "The game is heavily rigged to favor large companies."

jeromechoo• 5 months ago

The dilemma we're battling with here is the morality of avoiding most of your taxes if you can afford to hire the right people to manage your money.

Would it still be justified if we replaced "taxes" with "judgement in the afterlife"?

overrun113• 5 months ago

21% has been the highest possible corporate tax rate since 2017. It's not really fair to compare what Meta pays now to what you paid under an entirely different tax regime. You would also pay less in taxes running your business today than you did previously.

varispeed• 5 months ago

Big corporations don't pay taxes the same way as regular folks' businesses. Here in the UK the tax rates are _negotiated_ for the big guys. The system is entirely opaque and invites corruption.

latexr2• 5 months ago

Having said that, there is something to be said of all the tax that is indirectly being generated by Meta: they pay high salaries, and the people receiving those high salaries will pay a significant amount of income tax.

So a few people at the top who have more money than Lucifer himself keep getting richer until they are richer than God, and the people at the bottom take on the burden. How is that a fair or good system?

Here’s a better one: Raise taxes on large corporations and obscenely rich individuals and lower them for the people on the bottom. Then Meta can pay lower salaries, but the people getting them will still be able to keep as much or more as before. Meanwhile Meta gets less money to spend around destroying democracy, and tax revenue increases for the government who can spend them to better the lives of every citizen.

Wouldn’t that be preferable?

Let’s ignore for a moment the current bonkers situation in the US, where more tax revenue would only mean more money to be stolen from the people to enrich one guy and his circle of close friends. Hey, like Meta is doing!

HardCodedBias2• 5 months ago

IIUC Meta is spending more on capital (due to AI buildout) than they are receiving in profits.

Given Depreciation this is expected. And ... the intent of the law, to prompt capital investment.

What's the scandal, exactly?

HardCodedBias2• 5 months ago

Wait it gets worse for the "article"

ITEP gets the number by dividing Meta’s current federal tax expense ($2.82B) by its domestic pretax income ($79.64B), which is about 3.5–3.6%.

But Meta’s total 2025 GAAP effective tax rate was actually 29.6%, because it also booked a huge $15.93B charge tied to the Corporate Alternative Minimum Tax and valuation allowances.

loeg14• 5 months ago

Both numbers are wrong. Meta's actual income before tax was about $83 billion and its actual tax cost was $25 billion. This is an effective tax rate of ~30%.

https://investor.atmeta.com/investor-news/press-release-deta...

ansley• 5 months ago

a shamefully low amount.

LightBug1• 5 months ago

I'm actually surprised it's that high?

By the angle at which, say, Zuckerberg and Bezos bent over for Trump ... I thought they'd be well into negative taxes by now.

overrun113• 5 months ago

To the extent that this is even true it appears to be caused by three things: stock option compensation accounting, R&D deductions and bonus depreciation.

Stock option compensation rules have been a boon because Meta stock has risen 6x in three years. It's unlikely to do that again. My understanding is that this is symmetrical so if the stock trends down we will see an inflated effective tax rate for Meta.

Recent R&D rule changes allowing software engineering salaries for R&D to be written off seem reasonable and were quite popular on Hacker News. Previously these expenses were amortized over five years so this just pulls it forward. Subsequents years will see depressed expenses.

Bonus depreciation is once again just pulling forward legitimate expenses earlier than before. At worst they are just delaying giving the government its taxes and the corporations gain a few points of interest in between.

All of the tax rules used here are open to debate but none seem obviously wrong or nefarious. This is why people like Reich choose to keep things vague. Corporations brazenly stealing from your pocket is much more interesting than the mundane reality.

xnx2• 5 months ago

There are good arguments for making he corporate tax rate 0%.

tsoukase• 5 months ago

Taxation of the huge companies is obviously different than that of others. An army of accountants and lawyers work to find law loopholes to inflate the expenses. And then bribery can come to play. Which public servant can resist millions of dollars? They have to pay attention nobody finds out though.

In 2025, Meta paid an effective federal tax rate of 3.5%

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