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Public Company Corporate Tax Under the TCJA and Sales Factor Apportionment

October 21, 2020

In this article, published in Tax Notes Federal on Sept 21, 2020, CPA Chief Economist Jeff Ferry and CPA Board Member Bill Parks analyze the federal corporate tax paid by the S&P 500 companies in 2019 and find they paid on average less than 9% in cash federal tax last year. The authors compare it to two alternative tax systems, flat-rate sales factor apportionment, and sales factor apportionment with a progressive sliding scale from 10% to 45%. The look at the revenue and economic implications of the alternative tax systems. Our estimates show that by replacing the current system with an SFA system at 21 percent, the United States could have expected to earn an additional $97.8 billion in federal corporate tax receipts for 2019.

[Jeff Ferry and Bill Parks | September 2020 | Tax Notes]

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Tax Tax Strategy working paper

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