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%.
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.
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
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.
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.
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).
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!)
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.
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).
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.
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.
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.
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?
> 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!
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.
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.
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.
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."
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.
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:
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.
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.
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.
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).
> 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.
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.
Readit News
> 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...
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.
How are can we reasonably expect them to be deferred for? Are we talking on the order of years, or decades?
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!)
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?
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!
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.
Would it still be justified if we replaced "taxes" with "judgement in the afterlife"?
Or even just bees: https://mountainsweethoney.com/state-guide-for-beekeeper-tax...
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.
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.
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).
Total layman understanding here, but can you not do cash basis plus schedule AI?
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.