Part 5 of a series about Taxing Businesses
Although profits and therefore corporate tax receipts varied with the business cycle, the corporate tax receipts generally declined from the 1950s to late 1970s, falling to less than 3% of GDP in the bad economy due to inflation and oil shocks. However Federal tax receipts collected from corporate tax code never returned to previous values when the economy recovered because the number of c corporations declined and the number of pass-throughs increased. With the increase in pass-throughs one would expect the receipts from individual income tax returns to increase but they didn’t.
Data is from the Office of Management and Budget, Historical Tables, Table 2.3
Article by Visualizing Economics