Here's Biden's tax plan that corporations like Apple, Disney, and ExxonMobil are scrambling to squash right now
in the US, including Nike and Salesforce, paid no federal income taxes in 2020. During that year, when millions of Americans lost their jobs or were worried about their financial situation, corporate profits have seen a massive spike.
As the following chart shows, corporate profit before taxes was $1.8 trillion annualized during the second quarter of 2020, less than the almost $2 trillion annualized in the first quarter of the year. However, profits have climbed ever since the second quarter and were over $3 trillion annualized in the second quarter of this year. previously reported, Biden has waffled on the exact rate for a corporate tax hike — saying it could be somewhere between 25% and 28%.
Either way, the marginal tax rate for corporations in the top tax income bracket would not be as high as it has been in previous years, as the following chart shows. It's important to note that the top income bracket has changed over time. For instance, from 1993 to 2017 the top bracket included companies that made roughly $18 million in taxable income. From 1988 to 1992, the highest bracket included companies that made over $335,000 in taxable income.
The chart only includes the years from 1946 to 2020 to illustrate just how the federal corporate tax rates have changed over this time period. As the chart highlights, the lowest rate was from 2018 to 2020 after Trump's law dropped the rate from 35% to 21%. So although the proposed tax hike would be higher for corporations than it was after Trump's law, it wouldn't be as high as the top tax rate seen in previous years.
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