GAO: Average Corporate Tax Rate Is Just 13%
by Patrick Lester, 7/1/2013
Profitable U.S. corporations pay 12.6 percent of their pre-tax worldwide income in federal corporate taxes, according a new report by the Governmental Accountability Office (GAO), released July 1 by Sens. Carl Levin (D-MI) and Tom Coburn (R-OK). Their effective tax rate is lower than that faced by the typical middle-class American.
“Some U.S. multinational corporations like to complain about the U.S. 35 percent statutory tax rate, but what they don’t like to admit is that hardly any of them pay anything close to it,” said Levin in a statement.
The effective corporate tax rate is about one-third of the 35 percent statutory rate because of corporate tax breaks. Adding in foreign, state, and local taxes only increased the average effective tax rate by four percent to 16.9 percent, according to the report.
By comparison, the average American (in the middle 20th percentile of taxpayers) pays 15.4 percent of his or her income in federal taxes and 26.6 percent when state and local taxes are included, according to Citizens for Tax Justice.