“Federal tax payments by big businesses are falling much faster than anticipated in the wake of Republicans’ tax cuts, providing ammunition to Democrats who are calling for corporate tax increases,” writes Politico’s Brian Faler.
Corporate tax receipts so far this year are down by $11 billion, or nearly 9%, extending last year’s 31% slide. The Congressional Budget Office projected in January that corporate tax receipts would rebound this year and rise by $40 billion, or 20%. That’s not happening.
“Analysts agree they can’t yet explain the decline in corporate tax payments,” Faler says. “They have a host of theories though, such as businesses making wider-than-expected use of the law’s expanded breaks for business investments. It may also be an unexpected side effect of President Donald Trump’s trade wars.”
Meanwhile, according to the CBO, taxes paid by individuals rose 4% last year and are up 3% so far this year thanks to higher earnings resulting from the improved economy.