Palantir Technologies — the controversial data-analytics company used by federal agencies including ICE and other law enforcement entities — reported **$1.5 billion in U.S. income for fiscal year 2025 and paid zero dollars in federal income tax on that profit. That marks at least a third straight year the company has avoided the corporate income tax entirely despite profitability, thanks to special tax provisions in federal law that critics say disproportionately benefit large corporations.
This comes as questions mount about how corporations like Palantir benefit from taxpayer-funded contracts while sidestepping income taxes — even as ordinary Americans and small businesses pay their full share.
How Zero Tax Happens
Palantir’s own financial filings show no federal income taxes paid in 2025, despite $1.5 billion in U.S. earnings.
That result arises from a combination of provisions in the tax code, including:
- Immediate expensing of research and development — a provision expanded under the so-called “One Big Beautiful Bill Act” that allows companies to deduct R&D expenses immediately rather than over time, dramatically reducing current tax liabilities.
- Net operating loss carryforwards — allowing Palantir to use past losses to offset current profits.
- Stock-based compensation deductions and credits — large deductions tied to compensation structures common in tech.
While some of these deductions are codified in law and available to many corporations, critics argue the scale of the benefit for profitable companies like Palantir highlights systemic issues in the tax code — and a lawmaker-driven prioritization of corporate tax breaks.
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Tax Breaks While Taxpayers Foot the Bill
Palantir’s zero tax outcome is particularly noteworthy because the company also receives hundreds of millions in taxpayer-funded government contracts. Reporting from independent outlets notes Palantir took in substantial federal contract revenue in recent years while avoiding federal income taxes — a circumstance critics describe as “double dipping.”
At a 21% statutory corporate tax rate, $1.5 billion in profit would normally generate roughly $315 million in federal tax liability. Instead, Palantir’s deductions and credits reduced the tax bill to zero, with only state and foreign taxes reflected in filings.
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What This Means for Tax Policy and Fairness
Critics from think tanks like the Institute on Taxation and Economic Policy argue these outcomes are not isolated. They say recent tax legislation extended or enhanced corporate tax breaks that allow profitable companies to avoid federal income tax entirely — even as families and small businesses shoulder the burden.
Debate persists over whether the tax code needs reform to ensure that profitable corporations contribute a fair share. Proponents of the current law contend that immediate expensing and deductions spur investment and innovation. Opponents argue this shifts tax burdens away from the wealthy and large corporations and onto ordinary taxpayers.
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Prophetic Context (NASB 1995)
The Bible speaks to the nature of wealth, justice, and governance:
Tax policy that appears to favor the wealthy while making the general public carry the load raises enduring questions about fairness, stewardship, and the purpose of civic institutions.
Conclusion
Palantir’s financial outcome has reignited debate over corporate taxation, fairness, and fiscal policy. When highly profitable companies pay zero in federal income taxes — yet continue to benefit from government contracts and favorable legislation — Americans from all economic backgrounds have reason to ask whether the tax code serves the many or the few.
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