The GAO recently published a misleading headline that claimed: “from 2006 to 2012, at least two-thirds of all active corporations had no federal income tax liability.” While true, that’s because most businesses are unprofitable. According to analysis of the report by AEI’s Aparan Mathur, companies paid taxes equal to 32% of taxable income. While companies paid only a 16% tax rate on pre-tax income, that’s because companies had tax loss carry forwards from prior years. Even ardent tax reformers haven’t proposed taxing unprofitable companies! It’s disappointing when academic studies allow headlines to mislead the public.
Top Ten New York Times Bestselling Author
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- “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
- “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
- “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
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- “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
- “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
- “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
