This research shows an overall effective corporate income tax rate of between 32.1% and 33%. Be sure to view the slideshow.
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October 13, 2011
Capitol Hill Briefing: What Do Corporations Pay in Income Tax?
View the slide presentation from this event.
Much attention has been focused lately on American corporations “not paying their fair share” in taxes. Some members of the media as well as elected officials have gone through great effort to point out that although the U.S. corporate statutory rate, at 35%, is the second highest in the world; U.S. companies pay a much lower rate. The latest Tax Foundation research and IRS data however says otherwise.
Join us for a lunch briefing on October 17th as Scott Hodge and Will McBride present our latest findings using IRS data and shed some light on the myths that exist regarding U.S. corporations.
Highlights:
- As is often the case in tax discussions, anecdotes do not tell the whole story.
- The largest corporations pay the lion’s share of taxes. In 2008, the 1,937 largest companies were responsible for 68 percent of corporate tax revenue
- The overall effective corporate income tax rate on the worldwide income of U.S. corporations is between 32.1 and 33 percent, which is close to the statutory rate of 35 percent. (Emphasis mine)
When the guy giving the presentation was a major contributor to capital gains tax cuts and helping Bush construct his tax cuts in 2001 and 2003, forgive me for being sceptical.
Additionally the ETR does not take into account the tax credits these corporations receive, correct?
This is the paper to which I believe they are referring, although it is unclear – http://www.taxfoundation.org/files/sr195.pdf
Not exactly the most rigorous methodology. Was unable to find the data they claim to be using for their presentations.
Look at slides 21 and 22. Are they using the studies referenced there? I don’t know.
This is the paper that explains the slides: http://taxfoundation.org/files/sr194.pdf
sr195 is a bit different.
TJWP, skeptical is good, but be careful not to slip into the kill the messenger fallacy.
My read of the slideshow is that the ETR DOES take into account tax credits.
Thus, it should not be a surprise that the presenter wanted tax cuts, seeing that all recent studies find that the U.S. effective tax rate is nearly the highest in the world.
For those following along, ETR is effective tax rate. An effective tax rate refers to the actual rate, i.e., the rate existing in fact. This differs from the widely discussed statutory rate. A statutory tax rate is the legally imposed rate.
What this research shows is that our U.S. corporations’ effective tax rates are very near the statutory rates.
This is contrary to the meme, bias, reporting, whatever, that is often presented by the media.
get your facts straight
http://www.ctj.org/corporatetaxdodgers/CorporateTaxDodgersPR.pdf
Washington, DC – A comprehensive new study that profiles 280 of America’s most profitable
companies finds that 78 of them paid no federal income tax in at least one of the last three years.
Thirty companies enjoyed a negative income tax rate over the three year period, despite
combined pre-tax profits of $160 billion. These are among the findings in “Corporate Taxpayers
and Corporate Tax Dodgers, 2008-2010,” released today by Citizens for Tax Justice and the
Institute on Taxation and Economic Policy
That is a small sample. There are thousands of companies. What you posted does not even attempt to address the effective tax of all companies. red herring…
It does, however, speak to a skewed distribution where the brunt of the effective tax rate is born by the corporations that make less money.
REd herring? We’re talking about those companies that make the bulk of the profits of corporations.
Who cares about Bob and Sally down the street who owns an ice cream store and filed as a C-corporation and pulls in 50K a year? Oh, and even they as a corporation, can save on taxes bc corporations tax income after costs, unlike personal income which taxes you upfront, and then what you have left over is what you have to spend with. When I had my C corporation, I legally spent much of my incoming revenue on whatever i liked, expensed it, and had a paltry sum left over to be taxed.
Now back to the C corps that matter like GE and Google. They have the funds to hire the best tax attys and accountants in the biz to use loopholes to pay no where near the 35% statutory tax. We all know this. None of your biased reporting can gloss over these facts.
Your slide tells us that foreign tax credits WERE NOT included to get your near 35% effective tax rate, which includes foreign taxation.
Slide 20 states an effective tax rate in 2008 at 22.8% AFTER credits including a 10.7% avg foreign tax credit.
Poor attempt at biased reporting on your part.
Hanky foreign is included in the final etrs. Im away from my computer so i cannot direct you to the exact place in the research. You do realize that there is more than one study showing this, don’t you?
No foreign tax credits ARE NOT included. Again, refer to the slide 20 again.
Honest discussion is what I am looking for, not biased circular discussions.