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Distributing the Corporate Income Tax: Revised U.S. Treasury Methodology

Author

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  • Cronin, Julie Anne
  • Lin, Emily Y.
  • Power, Laura
  • Cooper, Michael

Abstract

The purpose of this analysis is to improve the U.S. Department of the Treasury’s distributional model and methodology by defining new model parameters. We compute the percentage of capital income attributable to normal versus supernormal return, the percentage of normal return attributable to the "cash flow tax" portion of the tax that does not impose a tax burden, and the portion of the burdensome tax on the normal return to capital borne by capital income versus labor income. In summary, 82 percent of the corporate income tax burden is borne by capital income and 18 percent is borne by labor income.

Suggested Citation

  • Cronin, Julie Anne & Lin, Emily Y. & Power, Laura & Cooper, Michael, 2013. "Distributing the Corporate Income Tax: Revised U.S. Treasury Methodology," National Tax Journal, National Tax Association;National Tax Journal, vol. 66(1), pages 239-262, March.
    • Handle: RePEc:ntj:journl:v:66:y:2013:i:1:p:239-62
    DOI: 10.17310/ntj.2013.1.09
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    5. Boris Cournède & Jean-Marc Fournier & Peter Hoeller, 2018. "Public finance structure and inclusive growth," OECD Economic Policy Papers 25, OECD Publishing.
    6. Margaret K. McKeehan & George R. Zodrow, 2019. "Balancing Act: Weighing the Factors Affecting the Taxation of Capital Income in a Small Open Economy," World Scientific Book Chapters, in: George R Zodrow (ed.), TAXATION IN THEORY AND PRACTICE Selected Essays of George R. Zodrow, chapter 12, pages 347-396, World Scientific Publishing Co. Pte. Ltd..
    7. Edward Fox, 2020. "Does Capital Bear the U.S. Corporate Tax After All? New Evidence from Corporate Tax Returns," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 17(1), pages 71-115, March.
    8. Gilbert E. Metcalf, 2014. "Using the Tax System to Address Competition Issues With a Carbon Tax," National Tax Journal, National Tax Association;National Tax Journal, vol. 67(4), pages 779-806, December.
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