The federal corporate income tax rate in the United States is supposedly 35%, but the truth is that corporations rarely pay that amount. Many large companies pay well below this rate using loopholes and tax breaks, often the result of aggressive corporate lobbying and campaign support. Republican leaders in Washington are currently discussing massive corporate tax cuts. They claim that reducing taxes will make the US more competitive with foreign nations. They also claim that companies will take their extra profits and reinvestment in the American workforce.
This project visualizes the data behind these claims.The inspiration.
Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies, wrote a New York Times article in late August about how companies exploit tax breaks and loopholes to pay surprisingly low federal tax rates. This sparked our interest.The data.
We use data from several different sources.
The Institute on Taxation and Economic Policy (ITEP) produced a report in March 2017 that documents 258 Fortune 500 corporations and their use of tax loopholes and special breaks over the past eight years. The 258 companies were selected on the basis that they were "consistently profitable over the eight-year period from 2008 to 2015." By focusing only on consistently profitable Fortune 500 companies, ITEP's report provides a clear picture of the effective tax rates that "our nation's biggest and most profitable companies" pay.
The Institute for Policy Studies (IPS) looked at a subset of the 258 companies explored in the ITEP report. In their August 2017 report, IPS focuses on 92 corporations that paid less than 20 percent of their earnings in federal corporate income tax. They investigated the claim that lower corporate tax rates would encourage companies to create more jobs by looking at companies that already benefitted from the tax rates that Republicans want to implement. IPS found that many of these "have not become powerful engines of economic growth." Many companies have slashed their employee numbers while increasing the compensation of their CEOs.
For the comparisons in our Explore the Data section, we pulled data from a variety of sources:
People tend to think that data is something new. That it is a new invention, meant to propel humankind forwards into the future. But the truth is that data has always existed. Little hints and clues in nature, guiding us to newer and greater heights. Farmers looking at weather patterns to predict the next rainfall. Sailors using the stars to guide their ships to safe haven. Everything is a pattern, waiting to be deciphered.
Pedal is a data visualization firm that helps companies and organizations find these patterns in their data and visualize them through beautiful interactive visualizations.
The world runs on numbers. We help you keep up.