What Happened to the Corporate Income Tax?
Biden wants companies to pay a bigger share of their profit to the federal government, but he’ll have to reverse a decades-long slide.
Corporate America has been paying less tax for a long while now.
Photographer: Angela Weiss/AFP via Getty Images
There are few policy discussions that can’t be improved with a chart that goes back more than century. So as the corporate income tax emerges as a leading focus of President Joe Biden’s plans to raise money for infrastructure and other priorities, here’s a look a how much money the tax and its precursor, the corporation excise tax, have brought in since 1909 — with individual income tax revenue alongside for comparison.
The corporate tax predated the individual income tax by four years, and during World War I it raised far more money. In the 1920s and 1930s the two brought in similar shares of federal revenue, although in those days excise taxes on alcohol, tobacco and other products sometimes brought in even more. Nowadays the corporate income tax comes in a distant third among the federal government’s revenue sources, far behind not only income taxes but social insurance taxes (Social Security and Medicare) at 6.2% of federal receipts in the fiscal year that ended in September.