RevenuesOption 63
Increase Corporate Income Tax Rates by 1 Percentage Point
| Billions of dollars | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2015-2019 | 2015-2024 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Change in Revenues | 7 | 10 | 10 | 10 | 10 | 10 | 11 | 11 | 12 | 12 | 46 | 102 |
Source: Staff of the Joint Committee on Taxation.
Note: This option would take effect in January 2015. Estimates are relative to CBO’s April 2014 baseline projections.
Most corporations that are subject to the corporate income tax calculate their tax liability according to a progressive rate schedule. The first $50,000 of corporate taxable income (after deductions and exclusions) is taxed at a rate of 15 percent; income of $50,000 to $75,000 is taxed at a 25 percent rate; income of $75,000 to $10 million is taxed at a 34 percent rate; and income above $10 million is generally taxed at a rate of 35 percent. Although most corporate taxable income falls within the 35 percent tax bracket, the average tax rate (corporate taxes divided by corporate taxable income) is lower than 35 percent because of tax credits and the lower tax rates that apply to the first $10 million of income. This option would increase all corporate income tax rates by 1 percentage point. For example, the corporate income tax rate would increase to 36 percent for taxable income above $10 million.