If the money borrowed is not spent on investments, then they would have to use after-tax money to pay the interest. This after-tax money needs to have been pre

If the money borrowed is not spent on investments, then they would have to use after-tax money to pay the interest. This after-tax money needs to have been pre-tax money at some point, so therefore, they do pay taxes at some point. Just not income tax presumably, but something akin to capital gains tax (e.g., sell off some of their assets/equity to pay interest). It's a lower tax rate, but in absolute terms, it's still a large numbner.