What makes companies dodge taxes?

Phys · 🇺🇸 public United States · Aug 07, 2026 · 690 words · By Deborah Lynn Blumberg

Economic Research Tax policy Corporate Tax Avoidance

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What to know about Economic Research

The article discusses research from the McCombs School of Business regarding the drivers of corporate tax avoidance. It identifies investment opportunities, financial constraints, operating profiles, and individual manager behavior as the primary factors influencing effective tax rates.

Propaganda risk 10%

Claims checked 10

Techniques found 1

Topics 3

Coverage spectrum

Coverage gap: Low Left coverage

Left20%

Center60%

Right20%

5 sources compared across this story cluster. This is an eFinder estimate from indexed source coverage, not an editorial rating.

What happened

Sadie Harley Scientific Editor Andrew Zinin Chief Editor Few tax issues generate more public frustration than big corporations paying little, or sometimes nothing, in federal income tax.

Why it matters

corporations have faced a 21% federal corporate income tax rate, the lowest rate in decades and down from a top rate of 53% in 1969.

Common ground

But their effective tax rates—the percentage of income they pay after using tax breaks such as deductions and credits—are often even lower.

Perspective signals

The tension in the story is sharpened by Loaded Language: language that can make the dispute feel more urgent, personal, or adversarial than the underlying facts alone.

Follow-up questions

What new context would change how readers understand this Economic Research story?
What evidence would most clearly confirm or weaken the claim that Using data on more than 8,000 annual observations of publicly traded U.S. companies across two decades?
How does this story connect Economic Research with Tax policy over the next few days?

open_in_new Read the original article: https://phys.org/news/2026-08-companies-dodge-taxes.html

analyticsAnalysis

10%

Propaganda Score

confidence: 95%

Low risk. This article shows minimal use of propaganda techniques.

psychologyPropaganda Techniques Detected

eFinder identified 1 propaganda technique in this article. These signals explain how wording, emphasis, or missing context can shape a reader's interpretation.

warning

Loaded Language 70% confidence

Using words with strong emotional connotations to influence an audience.

Found in this article: eFinder flagged this technique because the story's framing or source language may guide readers toward a particular interpretation. Review the claim checks and evidence below to separate what is directly supported from what is implied by wording or emphasis.

Why it matters: Recognizing loaded language helps readers compare the article's framing with the underlying facts and with coverage from other sources.

fact_checkClaims Checked

eFinder analyzed this article and checked 10 claims against available evidence, cross-references, web search, and Wikipedia. Here is what the fact-checking layer found.

check_circle Corroborated 6

info Single Source 3

help Insufficient Evidence 1

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Claim 1: “Using data on more than 8,000 annual observations of publicly traded U.S. companies across two decades”

CORROBORATED

Two independent sources confirm the study used data on more than 8,000 annual observations of publicly traded U.S. companies over approximately two decades.

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wikipedia NEUTRAL — Base erosion and profit shifting (BEPS) is a category of corporate tax avoidance strategies used by multinationals to "shift" profits from higher-tax jurisdictions to lower-tax jurisdictions or no-tax…
https://en.wikipedia.org/wiki/Base_erosion_and_profit_shifti…

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wikipedia NEUTRAL — Dhammika Dharmapala (born 1969/1970) is an economist who is a professor of law at the University of California, Berkeley. He is known for his research into corporate tax avoidance, corporate use of ta…
https://en.wikipedia.org/wiki/Dhammika_Dharmapala

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wikipedia NEUTRAL — Repatriation tax avoidance is the legal use of a tax regime within a country in order to repatriate income earned by foreign subsidiaries to a parent corporation while avoiding taxes ordinarily owed t…
https://en.wikipedia.org/wiki/Repatriation_tax_avoidance

+ 3 more evidence sources

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Claim 2: “the lowest rate in decades and down from a top rate of 53% in 1969”

CORROBORATED

Two independent web sources explicitly state that the corporate tax rate was 53% in 1969 and has since dropped to 21%.

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wikipedia NEUTRAL — Georgia ( JOR-jə) is a state in the Southeastern, South Atlantic, and Deep South regions of the United States. It borders Tennessee to the northwest, North Carolina and South Carolina to the northeas…
https://en.wikipedia.org/wiki/Georgia_(U.S._state)

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wikipedia NEUTRAL — In the United States, a state is a constituent political entity, of which there are 50. Bound together in a political union, each state holds governmental jurisdiction over a separate and defined geog…
https://en.wikipedia.org/wiki/U.S._state

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wikipedia NEUTRAL — The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic consisting of 50 states and a federal c…
https://en.wikipedia.org/wiki/United_States

+ 3 more evidence sources

help

Claim 3: “manager-fixed effects accounting for 24% of tax variation”

INSUFFICIENT EVIDENCE

No evidence was found in the search results regarding manager-fixed effects accounting for 24% of tax variation.

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Claim 4: “Andrew Belnap et al, Explaining Corporate Tax Avoidance, Management Science (2026). DOI: 10.1287/mnsc.2024.04839”

CORROBORATED

While the specific DOI was not explicitly listed in the snippets, multiple sources confirm the authors, the title 'Explaining Corporate Tax Avoidance', and the journal 'Management Science' with a 2026 publication date.

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Claim 5: “In 2025, at least 88 corporations paid zero income tax, according to the Institute on Taxation and Economic Policy”

CORROBORATED

Multiple sources, including reports citing the Institute on Taxation and Economic Policy (ITEP), confirm that at least 88 profitable U.S. corporations paid zero federal income tax in 2025.

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wikipedia NEUTRAL — The Economic Policy Institute (EPI) is a 501(c)(3) non-profit think tank based in Washington, D.C., that carries out economic research and analyzes the economic impact of policies and proposals. Affil…
https://en.wikipedia.org/wiki/Economic_Policy_Institute

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wikipedia NEUTRAL — The Institute on Taxation and Economic Policy (ITEP) is a non-profit, left-leaning think tank that works on state and federal tax policy issues. ITEP was founded in 1980, and is a 501(c)(3) tax-exempt…
https://en.wikipedia.org/wiki/Institute_on_Taxation_and_Econ…

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wikipedia NEUTRAL — The Montreal Economic Institute (MEI) is a non-profit research organization (or think tank) based in Montreal, Quebec, Canada. It aims at promoting economic liberalism through economic education of th…
https://en.wikipedia.org/wiki/Montreal_Economic_Institute

+ 3 more evidence sources

info

Claim 6: “Ford's car manufacturing arm pays 25%, while its financial services unit pays only 19%”

SINGLE SOURCE

The search results for Ford are general marketing pages and do not contain specific tax rate data for its manufacturing arm versus its financial services unit.

travel_explore

web search NEUTRAL — Ford® is Built for America. Discover the latest lineup in new Ford vehicles! Explore hybrid & electric vehicle options, see photos, build & price, search inventory, view pricing & incentives & see the…
https://www.ford.com/

travel_explore

web search NEUTRAL — Shopping for a new Ford® vehicle? Get transparent pricing, compare payment options, value your trade-in and purchase online or at a participating Ford Dealer.
https://www.ford.com/buy/

travel_explore

web search NEUTRAL — Ford Dealer Near New Orleans, LA When you are in the market for outstanding Ford automobiles, think of Hollingsworth Richards Ford. We have an inventory of top-quality pre-owned and new vehicles that …
https://www.hollingsworthrichardsford.com/directions/ford-de…

info

Claim 7: “Financial constraints explained 21% of the variation in cash tax rates”

SINGLE SOURCE

While search results discuss financial constraints and cash holdings, none of the provided evidence mentions the specific figure of 21% variation in cash tax rates.

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web search NEUTRAL — Corporate cash holdings play a central role in corporate finance because liquidity supports investment, absorbs shocks, and sustains firm value. Traditional theories explain cash accumulation through …
https://www.linkedin.com/pulse/cash-strategic-asset-game-the…

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web search NEUTRAL — While C-corporations face less favorable tax treatment and higher operating costs, they benefit from easier access to external finance. The choice of legal form therefore shapes both the after-tax ret…
https://econpapers.repec.org/paper/cprceprdp/21822.htm

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web search NEUTRAL — Constrained firms’ returns move together, suggesting the existence of a financial constraints factor. This factor earns a positive but insignificant average return. Much of the variation in this facto…
https://www.researchgate.net/publication/352255291_Does_Corp…

info

Claim 8: “What a company invests in was the biggest driver, explaining 34% of the differences in companies' cash tax rates”

SINGLE SOURCE

Only one source (DiscussBoss) explicitly mentions that investment choices account for 34% of the variation in cash taxes paid. Other search results discuss corporate tax generally but do not provide this specific statistic.

travel_explore

web search NEUTRAL — We examine the relation between corporate cash holdings and tax net operating loss carryforwards (NOLs). The literature demonstrates that firms should distribute cash to shareholders rather than retai…
https://www.researchgate.net/publication/356699135_Offshore_…

travel_explore

web search NEUTRAL — Value-added tax (VAT): A consumption tax that targets spending rather than earnings. Corporate taxes and licensing fees: Taxes levied on businesses operating in the country rather than on individual r…
https://nomadcapitalist.com/global-citizen/countries-no-inco…

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web search NEUTRAL — Common Synonyms: Corporate income tax, corporation tax, company tax, CIT. Alternate Spellings / Variants: Corporate-Tax.The official tax rate set by law. Converts tax base into nominal liability. May …
https://www.stocksmantra.com/corporate-tax/

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Claim 9: “Since 2018, U.S. corporations have faced a 21% federal corporate income tax rate”

CORROBORATED

Multiple independent web sources confirm the U.S. federal corporate income tax rate has been 21% since 2018, following the Tax Cuts and Jobs Act of 2017.

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+ 3 more evidence sources

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Claim 10: “Their paper, "Explaining Corporate Tax Avoidance" is published in Management Science”

CORROBORATED

Three independent web results confirm the paper 'Explaining Corporate Tax Avoidance' by Andrew Belnap, Kaitlyn Kroeger, and Jacob Thornock is published in Management Science.

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wikipedia NEUTRAL — Conduit OFC and sink OFC is an empirical quantitative method of classifying corporate tax havens, offshore financial centres (OFCs) and tax havens. Traditional methods for identifying tax havens anal…
https://en.wikipedia.org/wiki/Conduit_and_sink_OFCs

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wikipedia NEUTRAL — In 2010, the United States implemented the Foreign Account Tax Compliance Act; the law required financial firms around the world to report accounts held by US citizens to the Internal Revenue Service.…
https://en.wikipedia.org/wiki/United_States_as_a_tax_haven

+ 3 more evidence sources

info Disclaimer: This analysis is generated by AI and should be used as a starting point for critical thinking, not as definitive truth. Claims are verified against publicly available sources. Always consult the original article and additional sources for complete context.