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Depreciation Requires Businesses to Pay Tax on Income That Doesn’t Exist
While tax rates matter to businesses, so too does the measure of income to which those tax rates apply. The corporate income tax is a tax on profits, normally defined as revenue minus costs. However, under the current tax code, businesses are unable to deduct the full cost of certain expenses—their capital investments—meaning the tax code is not neutral and actually increases the cost of investment.
3 min read![Breast feeding supplies, breast feeding sales tax exemption](https://taxfoundation.org/wp-content/uploads/2019/05/Feminine-Hygiene-Nevada-Question-2-e1558379699812-300x200.jpeg)
![Taxes on Capital Income Are More Than Just the Corporate Income Tax, capital gains taxes, dividend taxes, capital income, corporate investment, capital gains taxes capital gains tax](https://taxfoundation.org/wp-content/uploads/2019/05/stock-buybacks-2-e1558035999749-300x200.jpeg)
Taxes on Capital Income Are More Than Just the Corporate Income Tax
The United States’ statutory corporate income tax rate is now more aligned with the rates of other nations . However, taxes on capital income, or corporate investment, are more than just the corporate income tax. Shareholder-level taxes, such as those on dividends and capital gains, also affect incentives to save and invest.
3 min read![Texas property tax, Texas property taxes, Texas legislature property tax Texas property tax cap](https://taxfoundation.org/wp-content/uploads/2019/05/texas-flag-1-300x200.jpg)
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Pass-Through Businesses Q&A
Pass-through businesses are the dominant business structure in America. Pass throughs file more tax returns and report more business income than C corporations. Pass-through businesses are not subject to the corporate income tax, but instead report their income on the individual income tax returns of owners. This blog will address some frequently asked questions about pass-through structure and taxation.
4 min read![Republican Study Committee RSC, tax extenders, fiscal year 2020 budget](https://taxfoundation.org/wp-content/uploads/2018/09/Capitol-hill-300x208.jpg)
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Taxable Income vs. Book Income: Why Some Corporations Pay No Income Tax
Why do some companies appear to be profitable but pay little or no federal income taxes? It’s largely due to differences between book and taxable income.
4 min read![Flag and buildings, corporate taxation, double taxation](https://taxfoundation.org/wp-content/uploads/2019/05/us-flag-business-corporate-Copy-e1579289326942-300x180.jpg)
The Lowered Corporate Income Tax Rate Makes the U.S. More Competitive Abroad
One of the most significant provisions in the Tax Cuts and Jobs Act was the reduction of the U.S. corporate income tax rate from 35 percent to 21 percent. Over time, the lower corporate rate will encourage new investment and lead to additional economic growth. It will make the U.S. more attractive for companies by increasing after-tax returns on investments and will discourage companies from shifting profits to low-tax jurisdictions.
2 min read![Rhode island online sales tax, Rhode island sales tax cut](https://taxfoundation.org/wp-content/uploads/2019/05/Rhode-Island-RI-state-house-crop-300x174.jpg)
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A Property Tax is a Wealth Tax, but…
Warren’s comparison between the property tax and her proposed wealth tax makes a good sales pitch. However, there are important differences between the taxes. By no means is the property tax in many jurisdictions perfect, but it is generally better structured than a wealth tax.
4 min read![business survival, high tax rates, American entrepreneurship, International Monetary Fund](https://taxfoundation.org/wp-content/uploads/2019/04/entrepreneurship-business-woman-e1556571023210-300x193.jpg)
New Study Finds that High Tax Rates Lower the Chance of Business Survival
America’s tax code distorts the economic decision-making of firms, such as the favorable treatment of debt financing over equity. This study adds to this argument while providing motivation for policymakers to focus on how reforms to tax policy can increase American entrepreneurship.
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