The US comparison: a self-employed plumber versus Big Tech
ByLoopholeKiln EditorialPublished
Figures current as of·Corrections
← What you pay versus what they pay
A sole-proprietor plumber earning $60,000, filing single for the 2024 tax year, pays an all-in effective rate of 25.4%. In 2025, four of the largest US technology companies together paid a 4.9% federal corporate income tax rate on $315 billion of US profit. That is more than five times the rate the giants paid. This page shows the working and is unusually careful about scope, because the US figures are federal-only on both sides where it matters.
The small business: the working
Sole proprietor, single filer, 2024, net profit of $60,000. No retirement contributions, no business credits, no itemised deductions beyond the standard deduction modelled. This is the baseline an unplanned sole proprietor actually faces. A representative 5% state income tax is included and labelled as a proxy.
| Step | Calculation | Result |
|---|---|---|
| SE tax base | $60,000 × 92.35% | $55,410 |
| SE tax (Social Security + Medicare) | $55,410 × 15.3% | $8,478 |
| Deduction: half of SE tax | $8,478 ÷ 2 | $4,239 deducted |
| Adjusted gross income | $60,000 - $4,239 | $55,761 |
| Standard deduction (2024) | $14,600 | |
| Federal taxable income | $55,761 - $14,600 | $41,161 |
| Federal income tax, 10% band | $11,600 × 10% | $1,160 |
| Federal income tax, 12% band | ($41,161 - $11,600) × 12% | $3,547 |
| Federal income tax | $4,707 | |
| State income tax | ~5% × $41,161 (representative) | $2,058 |
| Total tax | $8,478 + $4,707 + $2,058 | $15,243 |
| All-in effective rate | $15,243 ÷ $60,000 | 25.41% |
The multinational: four giants, federal corporate tax
In 2025, four of the largest US technology companies collectively paid 4.9% in federal corporate income tax on $315 billion of US pre-tax profit, an analysis of their own 10-K filings by the Institute on Taxation and Economic Policy found. The combined federal tax avoided against the 21% statutory rate was about $51 billion. This is the ratio straight from audited statements, not an estimate.
The comparison
| US plumber | Four big US tech firms (US federal, 2025) | |
|---|---|---|
| Profit | $60,000 | $315bn combined US profit |
| Federal income tax | $4,707 (federal IT only) = 7.8% of profit | 4.9% of US profits |
| All-in effective rate | 25.4% | 4.9% (federal only) |
| Gap | +20.5 pp (all-in vs Big Tech federal) | |
| Multiple | 5.2x the Big Tech federal rate |
Caveat A, the measure, handled cleanly. This is the comparison where scope matters most, so we hold it constant explicitly. The plumber's 25.4% all-in includes three mandatory federal levies (income tax plus both halves of self-employment tax) plus state. The giants' 4.9% is federal corporate income tax only. To compare like with like, strip the plumber down to federal income tax alone: that is 7.8% of profit, still 1.6 times the 4.9% the four giants paid. So even on the narrowest, fairest, federal-income-tax-only basis, the small business pays more.
Caveat B, the scope. The 4.9% is US-federal corporate tax only; it excludes state and payroll taxes the companies also pay. And against the global online retailer's global effective rate of 13.5%, the plumber's all-in 25.4% is 1.9 times as much. We give you both benchmarks so the multiple is never mistaken for a single magic number.
Why the plumber cannot get there
A sole proprietor has self-employment tax that no amount of planning removes, a single jurisdiction, and one set of accounts. The four giants have the international structures, the credits, and the scale that let federal corporate tax fall to 4.9% legally. In that same analysis, one of the four reported a current federal income tax charge of essentially zero for the year, the lawful result of credits and deductions the tax code provides. A small proprietor's was not zero, and could not be. The rules offer one set of taxpayers a route the other simply cannot take.
Key facts
- US sole-proprietor plumber, $60,000 profit, 2024: SE tax $8,478 + federal income tax $4,707 + state $2,058 = $15,243, an all-in rate of 25.41%.
- Federal-income-tax-only sub-rate: 7.8%, still 1.6x the Big Tech federal rate.
- Four of the largest US technology companies: 4.9% federal corporate tax on $315bn US profit in 2025; about $51bn avoided versus the 21% statutory rate.
- All-in multiple 5.2x; against the global online retailer's 13.5% the plumber is 1.9x.
- The 5% state rate is a labelled proxy; no-income-tax states sit lower, California higher.