Special Report No. 18
Executive Summary Following the 1992 election, Americans are more concerned about the federal fiscal situation than they have been in years. This concern is justified as the fiscal 1993 budget deficit is a record high of $32- billion. At the same time, President Clinton has a raft of new spending proposals that he needs to finance. Consequently, corporate income is once again being targeted by the government as a source of increased revenues.
The federal government currently raises $100 billion a year from the corporate income taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. , and state and local governments tap corporate America for an additional $25 billion. Federal corporate tax rates and bases have been on a roller coaster ride in recent years as rates have gone up and down and bases have expanded and contracted. Under current law, corporate taxable incomeTaxable income is the amount of income subject to tax, after deductions and exemptions. For both individuals and corporations, taxable income differs from—and is less than—gross income. above $75,000 is subject to an income tax rate of 34 percent.Share