Washington D.C — A new report from POLITICO details how giant corporations building data centers – projects that are increasingly unpopular with the American public – are raking in massive profits and slashing their own tax bills by billions of dollars thanks to the Republican Tax Law. While companies exploit these tax breaks to fuel AI infrastructure, working families across the country are left dealing with rising everyday costs such as energy bills and devastating cuts to essential programs like Medicaid and SNAP that were enacted under the exact same law.
“Working families are being forced to make impossible choices between buying groceries and keeping their health coverage due to severe cuts to SNAP and Medicaid, while massive corporations get billions in tax breaks to build data centers,” said Unrig Our Economy Campaign Director Leor Tal. “It is a tangible example of how the Republican Tax Law continues to benefit wealthy corporations at the expense of everyday Americans.”
POLITICO: Corporate tax payments plunge as AI feasts on new incentives.
Key Points:
- Corporate tax payments are plummeting even as profits soar.
- A big reason: all that AI spending.
- The tech world is pouring oceans of money into chips, data centers, power supplies and other components of the artificial intelligence infrastructure. And that’s eligible for generous tax breaks on investments Republicans included in their 2025 tax cuts.
- The tax incentives weren’t designed with AI in mind specifically — they’re available for all kinds of business investments. But it’s the tech industry that’s making the most of them, putting a major dent in corporate tax receipts.
- Budget forecasters say payments are down 25%, or $96 billion, after falling 15% last year. That’s fueling complaints those investment breaks are providing a windfall for the tech world, and giving a bad deal to taxpayers as Google, Microsoft and others would be spending oodles of cash on AI regardless of the tax incentives.
- “The notion that they’re doing this because of the tax laws doesn’t pass the laugh test,” said Matt Gardner, a senior fellow at the liberal Institute on Taxation and Economic Policy.
- A July POLITICO poll found more Americans oppose data centers than support them, a reversal from earlier this year. The budget impact also comes amid mounting concerns over the government’s towering debt, which now tops $40 trillion.
- Corporate tax payments typically rise in the wake of strong profits, and companies are now reporting their best results in years.
- But Republicans included a bevy of long-sought investment provisions in their “big, beautiful bill,” including expanded breaks for research and development programs; “expensing” provisions that allow companies to immediately deduct the cost of investments instead of spreading them out over many years; and a new subsidy for manufacturing structures.
- The Treasury Department also loosened a Biden-era minimum tax on big businesses that threatened to blunt the impact of the new provisions. Left in place, it would have taken back some of the tax benefits when companies’ tax rates fell too much. Meta told investors in April that change alone saved it billions of dollars in taxes.
- Companies in the thick of it have been reporting big drops in their tax bills. In July, Microsoft told investors that its current tax bill amounted to $2.5 billion, down from $14.1 billion the previous year, even as its income soared.
- The Congressional Budget Office underestimated business investment this year, which means the tax breaks will likely cost more than anticipated. In the second quarter of this year, nonresidential investment was $178 billion more than projected, according to the Bureau of Economic Analysis.
- The provisions are “offsetting the increases in those receipts that otherwise would have been expected, given the rise in corporate income,” CBO said in an updated tally of government revenues and spending.
- A perennial question with tax incentives is whether they are pushing people to do something the government wants them to do, and which they wouldn’t have done otherwise — or whether they’re simply giving people money for things they were going to do anyway.
- The depreciation breaks look like the latter, Gardner said. Companies are racing to build up artificial intelligence because they think it will be highly profitable, not because they are trying to reduce their tax bills. And many companies announced AI development plans well before Republicans’ tax cuts became law.
To learn more about the campaign, visit UnrigOurEconomy.com or contact press@unrigoureconomy.com
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About Unrig Our Economy
Unrig Our Economy is a national campaign to fix the rules of our economy to make it work for working people. We know that when the middle class does well, all of us do well — which is why we’re fighting on behalf of working Americans and holding corporations, their wealthy executives, and the politicians who enable them accountable.