Even as the federal deficit has ballooned, U.S. corporations are paying lower tax bills than ever before, according to one measure.
That’s the takeaway from a new report by the Center on Budget and Policy Priorities dissecting the tax structures of corporations, which CBPP Director Chuck Marr says are now paying taxes at “historical lows as a share of the [total] economy.”
Marr points to a basic discrepancy: While the U.S.’s top corporate tax rate of 35 percent is one of the highest in the world, the amount corporations actually end up forking over to the government is much lower, sometime as low as 4 percent. This is due to a dizzying number of deductions, write-offs, and other accounting tricks that allow corporations to legally reduce their tax burden.
In 2007, the report notes, the Treasury estimated federal government had missed an opportunity to collect $1.2 trillion due to various corporate tax expenditures over the previous decade.