Get All Access for $5/mo

Tesla Paid No Federal Income Taxes Over 5 Years, While Paying Top Execs $2.5 Billion, According to a New Report Between 2018 and 2022, more than 30 companies paid its top five executives more than they paid in federal income taxes.

By Sherin Shibu

Key Takeaways

  • A new report from The Institute for Policy Studies and Americans for Tax Fairness highlights what major companies paid (or didn't pay) in federal income taxes.
  • Elon Musk's Tesla was No. 1 on the list.
  • Other major companies, including T-Mobile, Ford Motor, and Netflix, were on the list too.

Some of America's biggest companies, including Tesla, T-Mobile, and Netflix, were front and center in a new report that reveals how much companies paid in federal income taxes — compared to how much they made in profit, and what they paid their top executives.

The Institute for Policy Studies and Americans for Tax Fairness released a report Wednesday that highlighted "a significant number" of major U.S. companies, 35 in total, that paid its top five executives more than they paid in federal income taxes between 2018 and 2022.

Elon Musk's Tesla was No. 1 on the list. The company paid its top five executives $2.5 billion over five years while bringing in $4.4 billion in U.S. profit.

Tesla Motors CEO Elon Musk speaks to the media next to its Model S during a press conference in Hong Kong. 25JAN16 SCMP/ Nora Tam (Photo by Nora Tam/South China Morning Post via Getty Images)

Musk has a net worth of around $184 billion, with about $69.7 billion of that total based on the value of his Tesla stock, according to the Bloomberg Billionaires Index. Musk is one of the top three richest people in the world.

The report points out that despite Tesla's record profits, the company "has never paid a nickel in federal income taxes." A potential cause of this trend, according to the report, could be Tesla carrying losses forward from before it became profitable.

"These loss carryforwards smooth out the often boom-bust nature of corporate finances," the report reads.

Related: 'Next Tesla' Electric Car Startups Hit Speed Bump: 'Investors Want To See Demand'

T-Mobile was second on the list, with a profit of $17.9 billion in the U.S. over five years and zero net federal income taxes. The top five executives there were paid $675 million from 2018-2022, according to the report, with CEO and president Mike Sievert receiving $158 million of that total.

There are a number of tax avoidance, or tax minimizing, strategies mentioned in the report, including shifting American profits to offshore tax havens or using stock option tax deductions.

The report does not take state, local, or payroll taxes into account.

Related: Elon Musk Warns Tesla Workers They'll Be Sleeping on the Production Line to Build Its New Mass-Market EV

Sherin Shibu

Entrepreneur Staff

News Reporter

Sherin Shibu is a business news reporter at Entrepreneur.com. She previously worked for PCMag, Business Insider, The Messenger, and ZDNET as a reporter and copyeditor. Her areas of coverage encompass tech, business, strategy, finance, and even space. She is a Columbia University graduate.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Science & Technology

Why Businesses Are Relying on Automation to Survive the Labor Crisis

Robots are revolutionizing industries by addressing labor shortages and enhancing efficiency, while businesses navigate challenges like workforce adaptation and high implementation costs.

Green Entrepreneur®

How Global Business Leaders Can Build a Sustainable Supply Chain

Businesses can build sustainable supply chains by leveraging technology to reduce environmental impact, optimize resources and track emissions while balancing operational efficiency and sustainability goals.

Side Hustle

'Hustling Every Day': These Friends Started a Side Hustle With $2,500 Each — It 'Snowballed' to Over $500,000 and Became a Multimillion-Dollar Brand

Paris Emily Nicholson and Saskia Teje Jenkins had a 2020 brainstorm session that led to a lucrative business.

Celebrity Entrepreneurs

The Pep Talk From Mickey Mouse We All Need to Hear, Compliments of Chris Diamantopoulos

Chris Diamantopoulos, the star of "The Sticky," "Red Notice" and the voice of Mickey Mouse, gets real about resilience, chasing dreams, and his desperate wish for a normal hobby.

Productivity

6 Habits That Help Successful People Maximize Their Time

There aren't enough hours in the day, but these tips will make them feel slightly more productive.