Corporate tax refers to the federal, state, and sometimes local levies on a corporation’s profits (i.e. how much they earn after deducting expenditures from revenue).
In the 1940s, individual income tax and corporate tax accounted for roughly the same percentage of the total GDP (gross domestic product). Corporations actually paid 1.2% of the total GDP while individuals paid only 0.9%, according to the Tax Policy Center.
However, individual income tax has continued to increase in its share of the GDP (meaning, the American public is paying more percentage-wise and dollar-wise). Corporations, on the other hand, have paid more dollar-wise but have maintained a share of around 1%-3% since the 60s.
This just accounts for individual income tax vs. corporate tax, by the way, as it relates to GDP. When you include the social security, sales and excise, property taxes, etc., you find that the American public pays close to, if not more than, 90% of $3,464,161 million (2019) in total government revenues each year. And how much do corporations pay? ~7%, according to the White House’s receipts.
Key Questions to Consider
The Zero Theft Movement is dedicated to eradicating the rigged layer of the economy. Corporate tax rates could be one economic area of many where the American public is getting ripped off.
In this article, we will address the basics of corporate taxes in the U.S., as well as provide some information on how much of government revenues come from individual taxpayers vs. corporations.
The following are a few key questions for you to consider:
- Does the American public pay much more in taxes than corporations do? If so, how much more does the American public pay?
- Should the corporate tax rate be increased, decreased, or even stay the same?
Unite with your fellow citizens and fight crony capitalists and corrupt officials! Our crowdsourced, crowd-approved Total Theft Report shows you just how much is being stolen from the American public.
What is Corporate Tax?
Corporate tax refers to the federal, state, and sometimes local levies on a corporation’s profits, or ‘operating earnings.’ Operating earnings is generally calculated as follows:
Revenue minus cost of goods sold (COGS), general and administration (G&A) expenses, marketing, R&D, depreciation, and so on.
To avoid paying (relatively) high tax rates in their countries of operation, corporations often deposit their profits in tax havens (i.e. countries with low corporate tax rates). Also, businesses can pay less than the statutory rate (the official, legally mandated rate) through government subsidies, tax loopholes, and other deductions. The effective corporate tax rate (statutory rate – deductions) refers to the actual rate a business/businesses pay in corporate taxes.
U.S. Corporate Tax Rate vs. Individual Income Tax Rates
Federal Corporate Tax Rate
In the U.S., the federal corporate tax rate fluctuated considerably until it leveled off at 35% in 1993. More recently, the 2017 Tax Cuts and Jobs Act reduced the corporate tax rate to 21%.
Charting data from the Tax Policy Center and the Federal Reserve Bank, the graph below shows how, historically, U.S. companies have paid less than the statutory corporate tax rate. Also, note how the statutory corporate tax rate went as high as 50% throughout much of the 50s.
On top of federal corporate taxes, most states and some localities require companies to pay a levy on their profits. State and municipal taxes are deductible expenses for federal corporate tax purposes.
Wikideas1, CC BY-SA 4.0 via Wikimedia Commons
FY 2019-2020 Federal Individual Income Tax Rates
Seven federal income tax brackets exist with percentages levied increasing as income increases (i.e. progressive tax).
| Single | Married Filing Jointly | Married Filing Separately | Head of Household | |
|---|---|---|---|---|
| 10% | $0 – $9,875 | $0 – $19,750 | $0 – $9,875 | $0 – $14,100 |
| 12% | $9,876 – $40,125 | $19,751 – $80,250 | $9,876 – $40,125 | $14,101 – $53,700 |
| 22% | $40,126 – $85,525 | $80,251 – $171,050 | $40,126 – $85,525 | $53,701 – $85,500 |
| 24% | $85,526 – $163,300 | $171,051 – $326,600 | $85,526 – $163,300 | $85,501 – $163,300 |
| 32% | $163,301 – $207,350 | $326,601 – $414,700 | $163,301 – $207,350 | $163,301 – $207,350 |
| 35% | $207,351 – $518,400 | $414,701 – $622,050 | $207,351 – $518,400 | $207,351 – $518,400 |
| 37% | $518,401+ | $622,051+ | $518,401+ | $517,401+ |
From The Tax Foundation
Each tax rate applies only to income in a specific tax bracket. Therefore, taxpayers who are in the 12% tax bracket and above do not pay taxes at a singular rate. They pay the rate for the income in each bracket.
For example, an individual making $60,000 a year pays 10% on $9,875, 12% on the next $30,249 ($40,125-$9,876), and 22% on the final $19,876 left of their salary.
The Panama and Paradise Papers provides evidence on a money laundering network involving tax havens all over the globe. Megacorporations and the super-rich could be evading taxes by stashing some of their money overseas. Find out what your fellow citizens have found through the Zero Theft voting platform…
Individual Tax vs Corporation Tax as Share (%) of GDP
| Year | Individual | Corporation |
|---|---|---|
| 1940 | 0.9 | 1.2 |
| 1950 | 5.7 | 3.7 |
| 1960 | 7.6 | 4.0 |
| 1970 | 8.6 | 3.1 |
| 1980 | 8.7 | 2.3 |
| 1990 | 7.9 | 1.6 |
| 2000 | 9.9 | 2.0 |
| 2010 | 6.1 | 1.3 |
| 2019 | 8.1 | 1.1 |
See Table 2.3 for the complete data set (1934-2025) on the Office of Budget Management’s (OBM) website.
In 1940, corporations paid a higher percentage (1.2%) of the U.S. GDP than individuals did (0.9%) in income taxes. However, by 1950, the roles shifted, with individuals paying 5.7% of the GDP in income taxes vs. 3.7% in corporate taxes.
Over time, as shown in the graph above, the disparity between shares of GDP has continued to widen. Individuals, in recent years, have paid about ~800%, or around 8 times, the percentage that comes from corporate taxes.
KEY QUESTION
- Should the American public have to pay income taxes that are 800% more than the corporate tax?
A Breakdown of U.S. Government Revenue
In truth, individual income tax just scrapes the surfaces of what the American public pays to the government. If you add up income tax, social insurance, sales and excise taxes individuals have to pay and compare that sum to corporate taxes, the difference proves staggering.
| Year | Ind. Income Tax | Social Insurance | Excise Taxes | Corp. Income Tax | Total |
|---|---|---|---|---|---|
| 1940 | $892 (14%) | $1,785 (27%) | $1,977 (30%) | $1,197 (18%) | $6,548 |
| 1950 | $15,755 (40%) | $7,550 (11%) | $4,338 (19%) | $10,449 (26%) | $39,443 |
| 1960 | $40,715 (44%) | $14,683 (16%) | $11,676 (13%) | $21,494 (23%) | $92,492 |
| 1970 | $90,412 (47%) | $44,362 (23%) | $15,705 (8%) | $32,829 (17%) | $192,807 |
| 1980 | $244,069 (47%) | $157,803 (31%) | $24,329 (5%) | $64,600 (12%) | $517,122 |
| 1990 | $466,884 (45%) | $380,047 (37%) | $35,345 (3%) | $93,507 (9%) | $1,031,958 |
| 2000 | $1,004,462 (50%) | $652,852 (32%) | $68,865 (3%) | $207,289 (10%) | $2,025,191 |
| 2010 | $898,549 (42%) | $864,814 (40%) | $66,909 (3%) | $191,437 (9%) | $2,162,706 |
| 2019 | $1,717,857 (50%) | $1,234,372 (36%) | $99,452 (3%) | $230,245 (7%) | $3,464,161 |
Data from the OBM
In 2019, individuals had to pay 50% (individual income tax) + 36% (social insurance) + excise taxes (3%) = 89%, or $3,083,103 million, of $3,464,161 in the government’s total revenue. Corporations, on the other hand, paid $230,245 million, or 7%
KEY QUESTION
- Does the American public pay much more in taxes than corporations do? If so, how much more does the American public pay?
Other potential reasons for why corporate tax accounts for only 7%of the government’s revenue
➤ Corporate Tax Evasion: Individuals vs. Big Business
Do YOU Consider the Corporate Tax Rate Theft?
Now, it’s your turn to play your part. With the evidence we have presented in this article, you can contribute to our movement to eradicate the rigged layer of the economy by voting on whether you think the current corporate tax rate should be viewed as theft.
Eradicate the Rigged Layer with the Zero Theft Movement
The rigged layer of the U.S. economy rips all of us off, including YOU. Crony capitalists and officials who have succumbed to regulatory capture have created the 50 years of wage stagnation and violations of antitrust laws.
The ZeroTheft Movement seeks to end the corporatocracy and rid moneyed interests from politics. Our mission is, and will continue to be, on waking up 330 million American citizens to the truth. We can all profit from an ethical, powerful, and safe economy if we stand up against the crony capitalists.
Will you refuse this call to action, or take action to eliminate the rigged layer of the economy?
View how much is being stolen, according to the public
Investigate your areas of interest
All areas of our economy could be experiencing rigging by crony capitalists and corrupt officials. We need to systematically investigate each instance in order to find out if best evidence suggests it is truly rigged.
Investigations into the finance sector
➤ AIG: The One-Way Bet Behind the 2008 Financial Crisis?
➤ Dark Pool Trading: An Introduction to ‘Invisible’ Exchanges
➤ The Savings and Loan Crisis: Another Bailout by the Public
Investigations into the healthcare industry
➤ Drug Prices: Big Pharma’s Big Profits, Your Big Losses
Alternatively, find an area that interests you most.
Serve your fellow citizens as a citizen investigator
The success of our movement rests in your hands, the leaders willing to dedicate time to conduct investigations into potentially rigged areas of the economy. With your valuable work, the movement has no solid ground to stand on, no foundations, no proof, to actually hold those corrupting our system accountable for their actions.
Commitment to nonpartisanship
The rigged layer causes all of us to suffer, regardless of our political allegiances. If we are to eliminate rigged economy theft, we have to set aside our differences and band together against crony capitalists and corrupt officials.
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Standard Disclaimer
The Zero Theft Movement does not have any interest in partisan politics/competition or attacking/defending one side. We seek to eradicate theft from the U.S economy. In other words, how the wealthy and powerful rig the system to steal money from us, the everyday citizen. We need to collectively fight against crony capitalism in order for us to all profit from an ethical economy.
Terms like ‘steal,’ ‘theft,’ and ‘crime’ will frequently appear throughout the article. ZeroTheft will NOT adhere strictly to the legal definitions of these terms (since congress sells out). We have broadly and openly defined terms like ‘steal’ and ‘theft’ to refer to the rigged economy and other debated unethical acts that can cause citizens to lose out on money they deserve to keep.