US Companies Haven't Paid The Statutory Tax Rate For At Least 45 Years

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		Home Tech Finance Markets Politics Strategy Entertainment Advertising Retail Sports Life Wednesday, February 6, 2013 US Companies Haven't Paid The Statutory Tax Rate For At Least 45 Years According to the OECD, the U.S. statutory corporate tax rate is 39 percent.  This is a combination of the 35 percent federal statutory rate and a weighted average of state marginal income tax rates. But thanks to a complicated tax code riddled with breaks, subsidies, and loopholes, the (effective) rate actually paid is much lower. From Goldman Sachs' David Kostin: However, statutory rates do not reflect the effective taxes paid by large-cap US firms. For the last 45 years, the median S&P 500 firm has paid an effective tax rate averaging more than 5 percentage points below the statutory rate. Despite statutory rates hovering near 39% for the last 25 years, effective tax rates have been gradually decreasing (see Exhibit 2). At 30%, the current S&P 500 median effective tax rate is almost 10 percentage points below the statutory level, and close to the global statutory average. The aggregate tax rate has averaged 33% over the past 10 years and was 26% over the past four quarters. According to Kostin's research, less than 10 percent of firms pay at least the statutory rate of 39 percent. "The tax preferences that create the gap between effective and statutory rates will likely receive scrutiny from policymakers as they attempt to reform the tax code," writes Kostin. "By closing the gap between effective and mandated tax rates, the government could raise revenues while lowering the statutory rate, thus presenting the change as a tax cut. Democratic leaders, including President Obama and Minority Leader Pelosi, have specifically mentioned targeting corporate tax strategies that create this gap." Here's the chart from Kostin's note: Read » Also On Money Game Today: Thursday Will Be The First Exciting Mario Draghi Press Conference In A Long Time MORGAN STANLEY: These Are The 7 Best Stocks In America Advertisement CHART OF THE DAY: The Outlook For Profit Margins Is Outrageous CHART OF THE DAY: Meanwhile, Earnings Expectations Continue To Come Down CHART OF THE DAY: The Scariest Jobs Chart Ever Share this: Facebook Twitter Digg Reddit StumbleUpon LinkedIn The email address for your subscription is: dwyld.kwu.jobhuntportal11@blogger.com Change Your Email Address | Unsubscribe | Subscribe | Subscribe to the Money Game RSS Feed Business Insider. 257 Park Avenue South, New York, NY 10010 Terms of Service | Privacy Policy

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