Corporate Tax Rates: Progressive, Proportional, or Regressive.

There are many differing views about the equity and impact of the corporate income tax structure. Suggestions to reform or eliminate the corporate income tax have been made by various accounting, economic, political, and public groups. An investigation into the underlying effective rate structure of the tax should he made to provide addition information about the tax's overall structure. This article presents an analysis of the average effective rates of more than 1,300 companies taken from Value Line Data Base-II tapes. The results indicate that although corporate income tax essentially is defined to be proportional, effectively it is regressive and very low. Implications of these results on reform decisions also are discussed.