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Do corporation pay tax??

SasxInc

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Jun 18, 2016
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Much of the political posturing is built around half-truths and partial information. This is happening in agendas from BOTH parties, so it is not my intention to start a partisan political debate.

One of the sound-bytes from conservative sources claim that U S Corporate taxation rates are the highest in the world. On the surface, that may be true, but real-world is these rates are being largely avoided. However, the liberal sources counter with the claim that "Two-Thirds of US corporations pay ZERO income tax..." It is this latter contention that I would like to focus on.

My question (if anyone knows) is whether this "two-thirds" includes Subchapter S corporations. It is reasonable to think that corporations with losses are not paying any income tax, but if these sources are including ALL corporations, let's stop and think about how misleading this is.

What percentage of corporations are S corps? Half, maybe? I dunno. Obviously an S corp pays zero tax by design. There are also public corporations, non-profit corporations, foundations which are corporately-chartered, etc.

Can anyone reflect on this with reasonable statistical representation? This thread borders on the political, but as preparers we often get sucked into these conversations and it would be nice to know the truth, as we will not get it from the biased sources.
 
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