May 3, 2004
In the five years running between 1996 and 2000, 95% of corporations paid less than five% of their income in federal taxes. 60% of corporations paid nothing at all.
At one time, in the 1960s, corporate taxes accounted for 33% of federal income taxes. Today they make up 14% of income taxes.
To make up for the drop in corporate taxes, the federal government has turned to taxes on individuals – but not in proportion to their income. The income tax itself is less graduated. But what makes it worse is that the kind of taxes we pay have been shifted. This year, the federal payroll tax – another name for Social Security and Medicare – accounted for practically as much federal money as the income tax: 42% of federal revenue came from the income tax and 41% from Social Security and Medicare. In 1960, Social Security taxes made up only 16% of federal revenue. Social Security is a regressive tax, since those with higher incomes pay no tax on income over $76,200, meaning that their overallpercentage goes down the more money they make.
If it seems that we are paying more in taxes while the corporations are paying less, that's because it's true. It's Robin Hood in reverse!