Trickling Down

Why the corporate rate is so low

35%

Nominal corporate income tax rate

12%

What companies actually paid in fiscal 2011

Much of the tax debate has been about whether the 1% pay their fair share. But corporations paid just 12.1% of their domestic income in federal taxes in Washington's most recent fiscal year--the lowest rate in at least 40 years. Companies are supposed to be taxed at 35%. Why are they paying so little?

In part to stimulate the economy. Uncle Sam gave companies the right to write off 100% of the purchase price of new equipment in 2010 and 2011. That has direct benefits of spurring...

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