A recent report from the Government Accountability Office prepared for review by the IRS found that profitable U.S. corporations paid, in 2010, federal income taxes amounting to 13 percent, and an effective tax rate of approximately 17 percent.
Proponents of reducing the U.S. corporate income tax rate have maintained that the U.S. statutory corporate tax rate of 35 percent, as well as the average effective tax rate, are high compared to other countries.
The report found that even with the inclusion of unprofitable filers—which pay little to no tax—all of the actual ETRs paid by surveyed companies were well below the high statutory tax rate of 35 percent. The inclusion of unprofitable filers increased the average worldwide ETR to 22.7 percent.
The GAO, however, was unable to account for variation across corporations. To conduct the survey, the GAO reviewed economic and accounting literature, and analyzed income and expenses reported by large corporations on M-3 schedules filed with the IRS.