One of the tried-and-true debates surrounding D.C. politics is about taxes, and specifically, who is paying too much or who is paying not enough.
Conservatives may say that corporate taxes, for example, are too high and are stifling business growth, while liberals may make the argument that corporations shouldn't have tax breaks that get them out of paying much of anything in corporate taxes.
Recently, Sen. Bernie Sanders (I-Vermont) used social media to get across his position that corporate income taxes are lower now than what they were over sixty years ago. Here's what Sanders posted:
"Want to better understand why we have a federal deficit? In 1952, the corporate income tax accounted for 33 percent of all federal tax revenue. Today, despite record-breaking profits, corporate taxes bring in less than 9 percent. It’s time for real tax reform."
Our partners at PolitiFact decided that Sanders' social media claim was well worth checking into. PolitiFact reporter Joshua Gillin says that Sanders' claim rates MOSTLY TRUE on the Truth-O-Meter. Gillin says that, for the most part, Sanders is on track.
"We looked back at the numbers for 1952, and yes, corporations did account for 33 percent of federal revenue," said Gillin. "There are a few things to keep in mind, though. One is that 1952 was a banner year for American business, so much so that the year ranked in the top three among corporate profits in giving to tax revenue. The other thing to remember is that there's been a big shift in the last thirty years in how corporations are classified. A lot of that money now is taxed as personal income, so even though businesses did make record profits last year, when you look at it as a percentage, it's definitely lower than 1952."
Gillin notes that the measurement that Sanders picked may not paint the best picture to support his hypothesis. PolitiFact talked to several economists who wanted to know what corporate income taxes were as a percentage of the GDP (Gross Domestic Product). "We took a look at that, too, and while corporate income taxes accounted for more then than they do today, the amount of difference is not nearly as wide," said Gillin.
According to Gillin, Sanders is pretty accurate with his numbers, but he glosses over the fact that taxes have shifted from corporate income to personal income in the last thirty years. Sanders' claim rates MOSTLY TRUE on the Truth-O-Meter.
SOURCES: CORPORATE INCOME TAX
- PolitiFact ruling
- Bernie Sanders, social media meme, received Aug. 27, 2014
- Office of Management and Budget, "Budget of the U.S. Government, Historical Tables," Fiscal Year 2015
- Federal Reserve Board of St. Louis, "Corporate Profits After Tax (without IVA and CCAdj)/Gross Domestic Product," accessed Aug. 28, 2014
- Federal Reserve Board of St. Louis, "Corporate Profits After Tax (without IVA and CCAdj)," accessed Aug. 28, 2014
- Fortune, "Is Burger King’s move to Canada a raw deal for U.S. taxpayers?" Aug. 28, 2014
- Email interview with Kyle Pomerleau, economist with the Tax Foundation, Aug. 27, 2014
- Email interview with Roberton Williams, fellow at the Urban Institute-Brookings Institution Tax Policy Center, Aug. 27, 2014
- Email interview with Daniel Mitchell, senior fellow with the Cato Institute, Aug. 27, 2014
- Email interview with Michael Briggs, communications director for Bernie Sanders, Aug. 27, 2014