aswathdamodaran.blogspot.com · 2021-04-20 · 1871d

The Corporate Tax Burden: Facts and Fiction

The article analyzes how corporate tax rates affect company value and earnings, examining the impact of the 2017 US tax reform and the proposed Biden administration tax increases. It provides detailed empirical analysis of effective tax rates across US companies, sectors, and internationally, demonstrating that lower tax rates have not significantly reduced corporate tax payments and that tax behavior varies substantially by industry and company characteristics.

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Metrics in this report

Cash Tax Rate - US Pharmaceutical Companies

32.96percent

aggregate

Trailing 12 months through September 2020

Effective Tax Rate - US Pharmaceutical Companies

18.19percent

aggregate

Accrual basis, trailing 12 months through September 2020

Historical US Federal Corporate Tax Rate Range

7-35percent

Early 20th century to 2017; lowest rates in 1930s, highest around 1980-2000

US Federal Corporate Tax Rate

21percent

Post-2017 tax reform; proposed increase to 28% under Biden administration

US Marginal Tax Rate (including state and local)

25-27percent

US companies as of 2021