Apr 12, 2017

Corporate America has long been cutting its own taxes

J. Scott Applewhite/AP

New research published this week from the National Bureau of Economic Research highlights the growing trend of businesses—large and small—organizing themselves not as traditional corporations, but as "pass-through entities," that pay personal tax rates on income.

Why it matters: The effective corporate tax rate is 27.1%, but for pass-through corporations it's 19%, well below the average effective corporate rate in OECD countries. This undermines the case for the necessity of corporate tax cuts, but it also complicates the tax reform process as pass throughs will likely take up the popular banner of small business to press for expensive cuts of their own.

Data: Owen Zidar; Chart: Andrew Witherspoon / Axios
Data: Owen Zidar; Chart: Andrew Witherspoon / Axios
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