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[quote user="schlimm"] [quote user="Sam1"]Corporations, including railroads, don't pay taxes. The pass any taxes levied on them to the people who buy their goods and services, unless they lack sufficient pricing power to do so.[/quote] These days corporations are often not even liable for Federal income tax.  Whether they are able to pass them on or not is not really relevant.  In the 1950s, corporations contributed to nearly 1/3 of the revenue for Federal expenditures.  Now that figure is less than 1/10 of tax revenue.[/quote] According to Page iii of the FY13 Financial Report of the U.S. Government, which is the federal governments annual financial report, corporate income taxes accounted for $270.4 billion or 9.5 per cent of FY13 federal tax revenues. Corporations are liable for more than income taxes. They pay excise taxes, property taxes, end use sales taxes, license fees, tariffs, etc. But they don't really pay any of these taxes.  As noted above, they are passed on to the people who buy their goods and services. The total tax bill for a corporation can be substantial. For example, in 2012 CSX - I am an investor - recorded $1.1 billion in federal and state income tax expense on $3.5 billion of operating income, for an effective tax rate of 31.9 per cent. Other taxes brought the total estimated tax bill to nearly 38 per cent of operating income. Corporate income taxes have declined significantly as a percentage of federal tax revenues for a variety of reasons.  Some of it is due to allowances, credits, and deductions.  Some of it is due to globalization, which amongst other things allows U.S. corporations to keep more of their earnings overseas and not have them taxed until they are brought home.   One of the biggest reasons for the decline in the corporate income tax as a percentage of federal tax revenues is how corporations are classified for tax purposes. Today many corporations are S Chapter corporations, which means that they fall under a different tax category than was the case many years ago. I don't remember off the top  of my head, but in the 1950s I don't believe that S Chapter corporations existed. Almost all corporations, no matter their size, were classified as a corporation for federal tax purposes. Today, many smaller and medium size corporations are S Chapter corporations. The profits from these corporations flow through to the owners. They report them on their individual income tax returns, and they pay federal and state income taxes on their share of the profits. They are not part of the corporate tax take, although they would have been prior to the implementation of S Chapter provisions.  At the end of the day, however, the concept is the same.  Businesses, including corporations, don't pay any taxes. They are passed through to the customer, unless the business lacks pricing power, in which case some or all of the taxes may be eaten by the owners (stockholders) and workers.
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