Is U.S. Corporate Income Double-Taxed?

32 Pages Posted: 12 May 2017

See all articles by Leonard E. Burman

Leonard E. Burman

Maxwell School; The Urban Institute; Syracuse University - Center for Policy Research

Kimberly A. Clausing

UCLA School of Law

Lydia Austin

The Urban Institute

Date Written: May 8, 2017


Using data from several sources, we show that the vast majority of corporate income is not double-taxed in the United States. We estimate that the taxable share of U.S. corporate equity has declined dramatically in recent years, from over 80 percent in 1965 to about 30 percent at present. We discuss the causes of these dramatic changes in the taxable share of corporate stock. Several factors explain the shift, including changes in retirement finance, demographic changes, changes in the prevalence of pass-through business organizations, and the increased globalization of capital markets. These findings are important for the development of corporate tax policy. Moving the capital tax burden to the individual income tax would either cause a large revenue loss or require a reform of tax preferences that currently exempt much corporate equity from taxation under the individual income tax. These findings also have implications for other important questions in public economics, including the measurement of the cost of capital, the importance of capital gains lock-in effects, the consequences of changes in dividend taxation, and the nature of clientele effects.

Keywords: corporate taxation

JEL Classification: H25

Suggested Citation

Burman, Leonard E. and Clausing, Kimberly A. and Austin, Lydia, Is U.S. Corporate Income Double-Taxed? (May 8, 2017). Available at SSRN: or

Leonard E. Burman

Maxwell School ( email )

400 Eggers Hall
Syracuse, NY 13244
United States
315-443-3114 (Phone)

The Urban Institute ( email )

500 L'Enfant Plaza NW
Washington, DC 20024
United States
2022615742 (Phone)

Syracuse University - Center for Policy Research ( email )

Syracuse, NY 13244
United States

Lydia Austin

The Urban Institute ( email )

2100 M Street, NW
Washington, DC 20037
United States

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