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Reason Foundation

The Truth on Corporate Tax Payments

Anthony Randazzo
September 9, 2011, 8:45pm

There is a lot of frustration out there about corporate taxation. You could sense it in the jobs speech, and the coming rhetoric about everyone needing to pay a fair share. It should be obvious that double taxation of individuals by hitting their income and then their stake in ownership of companies (all corporations are owned by people) that corporate taxes are not fair in the first place. But in setting that aside, the Tax Foundation has a very helpful new study articulating what corporations actually pay in taxes. Contrary to the popular talking points, it is not zero. Here are the highlights from the study:

So companies are paying, on average, 26 percent of their revenue as taxes, and if you consider the taxes they pay to foreign nations, an average between 32 and 33 percent. Set fairness aside, that is simply not competitive. That is not a tax environment that attracts companies to our shores or encourages expansion. And that hurts employment. The President's job plan should at the very least be adjusted to consider this reality. 

See the whole Tax Foundation study by William McBride here.


Anthony Randazzo is Director of Economic Research


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