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Nov 5, 2020 - Economy

The U.S. is as corporate tax-friendly as it's ever been

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Data: Bureau of Economic Analysis via FRED; Chart: Axios Visuals
Data: Bureau of Economic Analysis via FRED; Chart: Axios Visuals

Corporate taxes are lower, as a percentage of GDP, then they've ever been. And they're likely to stay there, if Senate Majority Leader Mitch McConnell refuses to bring any tax-hike bills to the floor.

By the numbers: Before 2018, corporate income taxes had fallen below 1% of GDP only once, for three quarters at the nadir of the Great Recession in 2008-09.

  • Nowadays, that's normal: They've been less than 1% of GDP in five of the past 10 quarters.

Between the lines: A recent paper by Steve Rosenthal and Theo Burke at the Urban-Brookings Tax Policy Center makes the point that corporate taxes are one of the few ways that the U.S. government can effectively levy taxes on foreigners.

  • "Foreigners now hold about 40 percent of total U.S. equity," they write — which means that they also reap much of the benefit from corporate tax cuts.
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