April 14, 2021

Nonprofit Quarterly: Pressure to Tax Corporations Rises as Infrastructure Gaps Come into Full View

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The bottom line: As research conducted by the Institute on Taxation and Economic Policy (ITEP) illustrates, at least 55 major US corporations that had a combined total of $40.5 billion in profits paid $0 in federal corporate taxes. If they had paid the current corporate tax rate of 21 percent, their tax bill would come to $8 billion. Adding insult to injury, many of these corporations were able to claim rebate checks from the government.

The holes in the US tax system are well known. Defenders of low corporate taxation claim that taxing more, whether by raising rates or limiting deductions, would destroy business. But available evidence suggests otherwise. Amy Hanauer, who directs ITEP, testified to the Budget Committee that “there is no evidence that low corporate taxes help the overall economy.” Hanauer notes that lowering the corporate tax rate in 2017 had failed to increase the rate of economic growth. Read more