Businesses are Central to Tax Collection Systems

Section: Members Highlights / Tax Facts
11 June 2018 | Tax Foundation / United States
United States


Scott Hodge, president of the Tax Foundation acknowledges that “although there is no empirical standard for what constitutes a “fair share” of the tax burden, tax fairness is often used by leading international organizations, such as the European Commission, and non-governmental organizations (NGOs) such as the Tax Justice Network, to justify higher taxes on businesses and corporations”.

The Tax Foundation released a new Tax Fact, Contrary to “Fair Share” Claims, Businesses are Central to Tax Collection Systems.

The key findings of the report are:

  • Recent studies show that businesses and corporations contribute significantly to government coffers through the taxes they are legally liable to pay and the taxes they are required to collect and remit on behalf of others.
  • A recent study by the Organisation for Economic Co-operation and Development (OECD) found that corporations and businesses pay an average of 33.5 percent of the total taxes collected by 24 leading OECD countries.
  • The Czech Republic has the most “business dependent” tax system, with businesses contributing 52 percent of all collections. Six countries receive more than 40 percent of their total revenues from business—Austria, France, Italy, the Netherlands, Poland, and Spain.

Concluding, Hodge says that “policymakers must be careful about trying to raise the tax burden on businesses because the ultimate economic burden of these tax hikes will ultimately fall on workers through lower wages, shareholders through lower returns, or consumers through higher prices or fewer goods”.

To read the full report click here.