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Tax burden shifting from individuals to corporations.

A study conducted by the Tax Foundation, a tax research group, has found the tax burden has shifted significantly from individuals to corporations since the pas sage of the Economic Recovery Tax Act of 1981, which initially lowered rates for both groups.

The study concluded that individual income tax receipts in 1991 will be $291 billion lower than they would have been had the tax code remained unchanged throughout the decade. However, corporate income taxes will be $48 billion higher. Since 1980, federal corporate income taxes have risen 24%, while state and local corporate income taxes have increased at an even more rapid rate of 39%.

The most dramatic jump has occurred in corporate payroll taxes, which include the corporate employer share of Social Security taxes, state unemployment insurance taxes, federal unemployment tax, railroad unemployment insurance and retirement and workers' compensation, in addition to income taxes. In the first quarter of 1991, corporate payroll taxes climbed to an annual rate of $153 billion, a 130% increase over the $66.6 billion in 1980. Currently, corporate payroll taxes represent 87% of corporate profits. In 1980, they amounted to only 58.9% of corporate earnings.
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Publication:Journal of Accountancy
Date:Sep 1, 1991
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