The world’s largest technology company known as “Silicon 6” has paid nearly $278 billion in corporate income tax over the past decade than expected based on the average statutory tax rate for US companies, according to a new report by the Fair Tax Foundation (FTF).
TechSpot Report Recent analysis conducted by Fair Tax Foundation (FTF) It reignited debate about the amount of taxes paid by the world’s largest technology company. The report reveals that the so-called “Silicon 6” (Amazon, Apple, Google Parent Alphabet, Meta, Microsoft, and Netflix) collectively avoided paying $278 billion in corporate income tax over the past decade.
The FTF has scrutinized the financial records and tax strategies of these digital giants. These digital giants have a total market capitalization of over $12.9 trillion, making them more valuable than the overall combination of the FTSE 100 and the Euro Stoxx 50 index. Silicon 6 has generated $11 trillion in revenue and $2.5 trillion in profit over the past decade, according to the report. However, their average valid corporate tax rate was only 18.8%, significantly lower than the US average of 29.7%, with the global average for the same period at 27%.
The report highlights that these companies have increased their reported tax payments by including the terms of the reported tax. If we exclude one-off repatriation tax payments related to past tax avoidance, their effective tax rates drop to an additional 16.1%.
Paul Monaghan, CEO of the Fair Tax Foundation, argues that tax avoidance remains “hardwired” in the business model of these companies. Companies have adopted aggressive tax practices, such as booking profits in low-tax jurisdictions and utilizing tax deductions such as the US foreign-derived intangible income (FDII) credits. FDII has been particularly advantageous for Silicon Six, bringing a $12 billion tax cut in 2024 alone and a total of $30 billion over the past three years.
The FTF report ranks Amazon as having “worst tax behavior,” citing profit shift practices, including booking a significant portion of UK revenue in Luxembourg, a low-tax jurisdiction. However, the average corporate tax rate for Amazon over the decade was 19.6%, higher than Netflix (14.7%), Meta (15.4%) and Apple (18.4%). Microsoft paid the highest rate at 20.4%.
The report also draws attention to the growing gap between the taxes that these companies actually pay and the taxes reported in their financial statements. Over the decade, the difference between headline tax rates paid and cash taxes reached $277.8 billion, while the reported gap between tax provisions and cash taxes was $82.1 billion.
In response to the report, representatives from Amazon, Meta and Netflix highlighted their compliance with existing tax laws and regulations. They highlighted significant investments in employment and infrastructure, arguing that these, combined with low-profit margins, naturally lead to lower cash tax rates.
The impact of Silicon Six exceeds its financial strength as it spends a $115 million lobbying government on the US and the European Union in 2024 alone. Their tax strategies have sparked surveillance from policymakers around the world, prompting a patchwork of responses such as digital services taxes in countries such as the UK, France, Austria and Turkey.
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Lucas Nolan is a reporter for Breitbart News, which covers the issues of freedom of speech and online censorship.
