Fact Check: "The corporate tax rate was reduced from 35 percent to 21 percent in 2017."
What We Know
The claim that the corporate tax rate was reduced from 35 percent to 21 percent in 2017 is accurate. This change was a significant component of the Tax Cuts and Jobs Act (TCJA), which was enacted in December 2017. According to the Brookings Institution, the TCJA reduced the top corporate tax rate by 40%, from 35% to 21%. This reduction aimed to stimulate economic growth and increase corporate investment, aligning the U.S. corporate tax rate more closely with those of other developed countries.
Additionally, the Government Accountability Office (GAO) confirmed that the TCJA lowered the top statutory corporate tax rate from 35% to 21%. This legislative change was part of a broader tax reform that included various provisions affecting corporate taxation.
Analysis
The evidence supporting the claim is robust, with multiple reputable sources confirming the reduction in the corporate tax rate. The Brookings Institution is a well-respected think tank known for its thorough research and analysis in economic policy, making its assertion credible. Similarly, the GAO, a government agency that provides auditing and evaluation services for Congress, also corroborates this information, lending further credibility to the claim.
While some discussions surrounding the TCJA focus on its long-term revenue implications and effectiveness in stimulating economic growth, they do not dispute the factual accuracy of the tax rate change itself. The Tax Policy Center also confirms this reduction, emphasizing its significance in the context of U.S. tax policy.
Critically, while the TCJA's reduction of the corporate tax rate is well-documented, discussions about its impact on effective tax rates and overall revenue collection are complex and nuanced. For instance, the GAO reported that while the statutory rate was lowered, the average effective tax rates for profitable large corporations fell from 16% in 2014 to 9% in 2018, indicating that the actual tax burden on corporations may have shifted due to various provisions in the TCJA (GAO).
Conclusion
Verdict: True
The claim that the corporate tax rate was reduced from 35 percent to 21 percent in 2017 is true. This reduction was a key aspect of the Tax Cuts and Jobs Act, which aimed to reform the corporate tax landscape in the United States. The evidence from multiple credible sources confirms the accuracy of this claim without any substantial contradictions.
Sources
- Did the 2017 tax cut—the Tax Cuts and Jobs Act—pay for itself? (https://www.brookings.edu/articles/did-the-2017-tax-cut-the-tax-cuts-and-jobs-act-pay-for-itself/)
- Corporate Income Tax: Effective Rates Before and After 2017 Law Change (https://www.gao.gov/products/gao-23-105384)
- How did the Tax Cuts and Jobs Act change business taxes? (https://taxpolicycenter.org/briefing-book/how-did-tax-cuts-and-jobs-act-change-business-taxes)
