Corporate Taxes as Percent of Federal Revenue in the US

Corporate taxes have long been a significant source of revenue for the US government. In 2019, corporate taxes accounted for about 8.2% of the federal government's total revenue.

The US government has a complex tax system, with multiple taxes and tax rates. Corporate taxes are just one part of this system.

The share of corporate taxes in federal revenue has fluctuated over the years. In 1989, for example, corporate taxes accounted for about 10.2% of federal revenue.

Despite their importance, corporate taxes have been declining in recent years. In 2015, corporate taxes accounted for about 7.3% of federal revenue.

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The corporate income tax has been a significant source of federal revenue, yielding 9 percent of federal government revenue in 2022. This is a notable drop from its peak in the late 1960s, when it averaged 3.7 percent of GDP.

In recent years, the corporate income tax has struggled to maintain its share of GDP, averaging just 1.5 percent over the past ten years. However, in 2022, it saw a slight increase to 1.7 percent of GDP.

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As a result, the corporate income tax has become a smaller portion of total federal revenue, making up under 10 percent of the total in most years since the early 1980s. This is a significant decline from its early 1950s peak, when it accounted for about one-third of total revenue.

The individual income tax has provided nearly half of total federal revenue since 1950. This steady stream of revenue has been a key contributor to the federal budget.

Excise taxes brought in 19 percent of total revenue in 1950, but their share has significantly decreased over the years, now accounting for only about 2 percent of total revenue. This decline is a notable trend in the evolution of federal revenue sources.

The corporate income tax, which once accounted for about one-third of total revenue in the early 1950s, has seen its share drop to under 10 percent in most years since the early 1980s. This shift has had significant implications for the federal budget.

Payroll taxes have become a more substantial source of revenue, providing nearly one-third of revenue since the early 1990s. This increase in payroll taxes has helped to stabilize the federal budget.

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In recent years, taxes paid by corporations have accounted for a declining share of federal revenue. In 2015, corporate taxes accounted for 13.5 percent of all federal revenue, a significant drop from 44 percent in 1944.

The corporate income tax rate has been lowered over time, allowing corporations to exploit loopholes and avoid paying billions in taxes. For example, corporations can change their addresses to another country and avoid paying taxes, a practice known as an inversion.

The U.S. government has lost billions of dollars in revenue due to corporate tax breaks. In 2013 alone, corporations avoided paying $176 billion of what they owed in taxes. This is a stark contrast to the early 1980s, when corporate taxes provided about one-third of the total revenue.

Payroll taxes have become a more significant source of revenue since the early 1990s, providing nearly one-third of revenue in recent years. In contrast, excise taxes have declined significantly, providing only about 2 percent of total revenue in recent years.

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Here's a breakdown of the major types of taxes and their share of federal revenue in 2020:

The complexity of the tax code has allowed corporations to exploit loopholes and avoid paying taxes, exacerbating economic inequality. In recent decades, the top income tax rate was as high as 90 percent for the very highest incomes, but only a portion of a person or household's income is actually taxed at those rates.