National Tax Journal

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

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

66 National Tax Journal 239-62 (March 2013)


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.

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