Book contents
- Frontmatter
- Contents
- Preface
- 1 Economic foundations of U.S. tax policy
- 2 The individual income tax
- 3 Economic effects of individual income taxes and inflation
- 4 Expenditure versus income taxation
- 5 The taxation of capital gains
- 6 The corporation income tax
- 7 The corporation income tax and inflation
- 8 Social security payroll taxes
- 9 The value added tax
- 10 The sales tax
- 11 State taxes
- 12 Local government taxes
- 13 The distribution of tax burdens
- 14 Status of U.S. taxes and policy
- Appendix
- References
- Index
6 - The corporation income tax
Published online by Cambridge University Press: 05 May 2010
- Frontmatter
- Contents
- Preface
- 1 Economic foundations of U.S. tax policy
- 2 The individual income tax
- 3 Economic effects of individual income taxes and inflation
- 4 Expenditure versus income taxation
- 5 The taxation of capital gains
- 6 The corporation income tax
- 7 The corporation income tax and inflation
- 8 Social security payroll taxes
- 9 The value added tax
- 10 The sales tax
- 11 State taxes
- 12 Local government taxes
- 13 The distribution of tax burdens
- 14 Status of U.S. taxes and policy
- Appendix
- References
- Index
Summary
The United States corporate income tax was passed into law in 1909, predating the individual income tax by more than four years. This tax has been an integral part of the federal revenue system for almost fifty years but has been declining as an important source of revenue since the Korean War. In 1950, it accounted for 28 percent of total federal receipts; in 1960, 23 percent; and in 1970, 17 percent (U.S. Bureau of Census 1974:222). By 1982, the figure had dropped to 12 percent (U.S. Bureau of Census 1983:4). The estimated figure for 1985 was also 12 percent (Council of Economic Advisers 1984:220, 304–5).
Introduction
Currently, the corporate tax is the center of much attention because many analysts believe it to be both inequitable and inefficient. They argue that it has inhibited economic growth by stifling capital formation, and that the net real rates of return provided by investment are not sufficiently high to attract the funds of investors. Moreover, the enormous and continuing federal budgetary deficits have created extremely large demands in the money and credit markets, driving up interest rates, attracting the relatively small amount of savings now available, and generally exacerbating the problem of capital formation. The issue of economic growth has caused analysts, investors, and politicians to focus attention on the nature and structure of the corporate income tax.
- Type
- Chapter
- Information
- United States Taxes and Tax Policy , pp. 119 - 149Publisher: Cambridge University PressPrint publication year: 1986