The Corporate Tax Burden
Special Report No. 126
In October, the Congressional Budget Office released the final revenue figures for fiscal year 2002.1 That year, corporate tax collections totaled $140 billion, down from $151 billion in 2001. Though the dollar amount of collections fell, corporate income tax collections as a share of total federal revenue edged up slightly from 7.6 percent in fiscal 2001 to 8.0 percent in fiscal 2002. These are both lower than in any year since 1983. Some policymakers in Washington, including presidential aspirants, have pointed to these figures as proof corporations are not paying their fair share of federal taxes. There is, however, more to the story.
Federal dependence on the corporate income tax peaked during World War II and has declined steadily with occasional blips upward ever since. In 1943 the nation collected 39.8 percent of federal revenue from the corporate income tax, but this figure fell rapidly during the post-war years. During the 1970s, the average share was 15 percent, and during the 1980s it was 9.2 percent. During the 1990s, corporate tax collections ticked upward to an average of 11.8 percent of federal revenue because of remarkably strong economic activity and President Clinton’s 1993 tax package, which raised the top statutory corporate income tax rate from 34 percent to 35 percent. Corporate taxes have since resumed their long-term downward trend.
1 Congressional Budget Office, Monthly Budget Review, October 9, 2003.
Was this page helpful to you?
The Tax Foundation works hard to provide insightful tax policy analysis. Our work depends on support from members of the public like you. Would you consider contributing to our work?Contribute to the Tax Foundation
Let us know how we can better serve you!
We work hard to make our analysis as useful as possible. Would you consider telling us more about how we can do better?Give Us Feedback