NCPA - National Center for Policy Analysis

Corporations Paid More Taxes in 2000

October 22, 2001

Many policy makers have recently asserted that a business tax cut would be an effective economic stimulus. Federal revenue from taxes on corporations in the United States rose during the 1990s, according to a new Tax Foundation Special Report, "The Corporate Tax Burden."

According to Tax Foundation Chief Economist John S. Barry, author of the study, "Every dollar in taxes paid by American business actually comes out of the pockets of customers, employees and shareholders -- all of whom need a boost right now."

  • America's corporations have paid more income taxes every year since 1992.
  • Federal collections are estimated to top $200 billion in 2000.
  • This represents an inflation-adjusted increase of 78.8 percent in corporate income tax collections between 1992 and 2000.

All told, the average effective federal tax rate on corporate income in 2000 was lower than it was in 1970, down from 38 to 26 per cent. In fact, the effective rate in 2000 was below the average for the 30-year period, 29.2 percent.

Source: John S. Barry, "The Corporate Tax Burden," Special Report No. 107, October 19, 2001, Tax Foundation, 1250 H Street, N.W., Suite 750, Washington, D.C. 20005, (202) 783-2760.


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