While Tesla executives were paid $2.5 billion, the company received refunds on federal income taxes and paid none.

The recent findings from a study conducted by the Institute for Policy Studies and Americans for Tax Fairness shed light on the alarming trend of major U.S. companies paying their top executives more than what they contribute in federal income taxes. Among the list of offenders, Tesla stands out as a significant example.

Over the span of five years from 2018 to 2022, Tesla managed to rake in $4.4 billion in U.S. profits while rewarding its executives with a staggering $2.5 billion in compensation. Shockingly, Tesla not only evaded paying any federal taxes during this period but also received a $1 million refund from the government. This revelation is especially disturbing considering that Tesla is led by Elon Musk, the second wealthiest individual globally, with a net worth of $207.9 billion according to Forbes.

In total, 35 companies, including names like T-Mobile, Netflix, and Ford Motor, paid their top executives a combined $9.5 billion in compensation while managing to receive $1.8 billion in refunds from the government. Astonishingly, 18 of these companies reported net profits over the five-year period but still managed to avoid paying any federal income tax.

For instance, Ford Motor, a well-known automotive manufacturer, paid out $355 million to its top executives while securing $7.8 billion in corporate profits. The company contributed $121 million in federal income tax, equivalent to a tax rate of 1.5%.

T-Mobile, another prominent player in the telecommunications industry, made $17.9 billion in profits, awarded its executives $675 million, and received an $80 million tax refund. Notably, T-Mobile has been actively lobbying Congress for tax breaks, having spent $9 million on such efforts in 2022 alone.

Netflix, a popular streaming service, paid $236 million in federal income taxes, representing just 1.6% of its $15.1 billion earnings. This figure is slightly over one-third of what the company paid its top executives. With the statutory rate for federal income tax set at 21%, these revelations undoubtedly raise concerns about corporate tax practices within the industry.

It is imperative for the automotive and broader corporate sector to prioritize fair and responsible tax practices to uphold societal trust and accountability.