Make us your home page
Instagram

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

PolitiFact.com | Tampa Bay Times
Sorting out the truth in politics

PolitiFact: Group's corporate tax ratio claim greatly exaggerated

The statement

"In 1950, corporations paid $3 in taxes for every $1 by a worker. Today, they pay 22 cents for every $1 by a worker."

Facebook posts

The ruling

The Facebook post was credited to an activist group called "The Other 98 Percent," which describes itself as at the forefront of a "new movement to kick corporate lobbyists out of D.C., hold our elected officials accountable, and fix our democracy to make Washington work for the other 98% of us." We tried to reach the group through its website but did not receive a response.

The Facebook post cited the Office of Management and Budget — the executive branch's budget-policy arm — but it didn't get any more specific than that. When we went to OMB's website, we found some historical data that addresses this claim.

The simplest ratio to use is the ratio of corporate income taxes paid to individual income taxes paid. In 1950, corporations paid 66 cents in income taxes for every dollar of income taxes paid by individuals — nowhere near the ratio claimed in the Facebook post. In 2011, corporations paid 17 cents in income taxes for every dollar in income taxes paid by individuals. That's not exactly 22 cents, but it's in the ballpark.

By this measurement, the Facebook post is misleading. It's true that the share of income taxes paid by corporations has declined over the years, but not as dramatically as the post suggests.

You can also use a more detailed ratio. Under this formula, total corporate taxes consist of corporate income taxes plus the employer's share of payroll taxes. Individual taxes consist of individual income taxes, plus the employee's share of the payroll tax, plus excise taxes (such as levies on alcohol, tobacco, telecommunications and gasoline), plus the estate tax.

Using this formula, the ratio in 1950 was 48 cents paid by corporations for every dollar paid by workers — even more incorrect than it was using our first calculation. In 2011, the ratio was 37 cents paid by corporations for every dollar by workers.

Using these numbers, the Facebook post is misleading, as well.

"This seems to be a very flippant comment without any basis," said William McBride, an economist at the Tax Foundation, a business-backed group that studies tax issues.

The one thing the Facebook claim gets right is that corporations are carrying less of the burden for taxation now compared to 1950. But the difference is not nearly as dramatic as the post indicates, and its numbers are wide of the mark. On balance, we rate the claim Mostly False.

This ruling has been edited for print. Read the full version at PolitiFact.com.

share your opinions

MAIL: Business News Letters, P.O. Box 1121,

St. Petersburg, FL 33731

FAX: (727) 893-8939

E-MAIL: biznews@

tampabay.com (Please

use the word "Letter" in

the subject field.)

WEB: www.tampabay.com/letters (Choose the

"Business" option.)

PolitiFact: Group's corporate tax ratio claim greatly exaggerated 07/07/12 [Last modified: Tuesday, July 10, 2012 3:27pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Chris Archer knocked out early as Rays lose to Orioles (w/video)

    The Heater

    BALTIMORE — Another short outing by Chris Archer led to another long afternoon for the Rays in a 9-4 loss to the Orioles on Sunday.

  2. Bucs-Vikings report card: Where's this explosive offense we heard about all offseason?

    Bucs

    O NO

    True, the Bucs defense looked pretty leaky in the 34-17 loss to the Vikings. But you know what needs to happen when the defense is getting torched? The offense needs to step up. In games such as these, with defensive players seemingly getting hurt every play, the offense needs to outscore the other …

    Minnesota Vikings cornerback Trae Waynes (26) intercepts a Jameis Winston pass intended for wide receiver DeSean Jackson (11) during the first half. [LOREN ELLIOTT   |   Times]
  3. Bucs-Vikings: Instant analysis from Tampa Bay's 34-17 loss

    Bucs

    MINNEAPOLIS — Here's Rick Stroud and Tom Jones' instant analysis from the Bucs' 34-17 loss at Minnesota Sunday. More to come from Rick & Tom — and Greg Auman —- from Minneapolis later today.

    Minnesota Vikings wide receiver Jarius Wright (17) dives over the pylon for a touchdown as  Bucs cornerback Ryan Smith (29) defends. [LOREN ELLIOTT   |   Times]
  4. Worst-Case scenario: Case Keenum, Vikings hand Bucs 34-17 loss

    Bucs

    MINNEAPOLIS — With key defensive starters out with injury, the Bucs were dominated by the Minnesota Vikings on Sunday, with fill-in quarterback Case Keenum beating Tampa Bay for the third year in a row, …

    Bucs quarterback Jameis Winston (3) is sacked by Minnesota Vikings defensive end Everson Griffen (97) during the first half. [LOREN ELLIOTT   |   Times]
  5. Officials: 1 dead, 7 victims hurt in Tennessee church shooting

    Nation

    NASHVILLE, Tenn. — A masked gunman entered a church in Tennessee on Sunday and opened fire, killing at least one person and injuring seven others before apparently shooting himself, an official said.