The income tax rate in the third quarter of 2022 for S&P 500 companies was 19.50%, according to calculations by Howard Silverblatt of S&P Dow Jones Indices. That was a bit lower than the 20.05% rate recorded the quarter before, but higher than the 16.97% recorded a year earlier.
The data shows just how powerful the Tax Cuts and Jobs Act of 2017, passed by a Republican Congress and signed into law by former President Donald Trump, has been when it comes to corporate tax rates. According to Silverblatt, the average tax rate for S&P 500 companies just before the tax cut bill was passed was 25.45%, while the average quarterly tax rate from 2018 to 2022 was 18.02%.
An even starker comparison can be seen going back 25 years. In the third quarter of 1997, the tax rate for S&P 500 companies was 36.42% – nearly twice the level seen today.