US Corporate Tax System

Summary

The corporate tax is essentially a flat rate tax; it is currently 46 percent. The rate was reduced from 52 percent to 48 percent by the 1964 tax cut, raised temporarily by the 10 percent Vietnam War but was also reduced in 1978 by the tax act to the current level.The tax base for a nonfinancial corporation investing in fixed assets is derived by subtracting from gross sales the costs of input increases or when tax credits are allowed against calculated tax liabilities. Through various legislation, there have been increases in levels of depreciation allowances and credits at any given level of income.