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The Federal Corporate Income Tax Since WWII

By: J. Scott Moody

Download Special Report No. 81

Special Report No. 81

Executive Summary
In real terms, federal 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. receipts have followed a slowly increasing trend since 1950. Receipts have fluctuated over time with the business cycle and enactment of various tax legislation. By 1994 corporate income taxA corporate income tax (CIT) is levied by federal and state governments on business profits. Many companies are not subject to the CIT because they are taxed as pass-through businesses, with income reportable under the individual income tax. receipts had risen to their second highest level over this time period.

While corporate income tax collections are an important barometer of the corporate tax burden, the primary focus of this paper is another important measure of the tax burden, the average effective corporate income tax rate (corporate taxes paid as a percentage of net income).