What's New at ITEP
Thursday, October 19, 2000

CORPORATE INCOME TAXES IN THE 1990S

A study released by the Institute on Taxation and Economic Policy (ITEP) on October 19 finds that many of the country's biggest corporations are once again paying little or nothing in federal income taxes.

ITEP's new report examines the U.S. profits and federal income taxes of 250 of the nation's largest and most profitable corporations over the 1996-98 period. Although big corporations ostensibly are supposed to pay 35 percent of their profits in taxes, the 250 companies in ITEP's survey paid only 20.1 percent in 1998. That was down from 22.9 percent in 1996, and far below the 26.5 percent that a similar group of large companies paid back in 1988, soon after passage of the loophole-closing 1986 Tax Reform Act.

"With significant help from Congress, corporations appear to be finding ways around the tax reforms adopted in 1986," said Robert S. McIntyre, a principal author of both the new study and previous corporate tax studies in the 1980s. "We hope our findings will encourage lawmakers to reexamine this important area of taxation."

The full text of the study is available (in PDF format) on the ITEP website at http://www.itepnet.org/corp00pr.htm.

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