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The Tax Foundation is the nation’s
leading independent tax policy
research organization. Since 1937,
our research, analysis, and experts
have informed smarter tax policy
at the federal, state, and global
levels. We are a 501(c)(3) nonprofit
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Double Taxation of Corporate
Income in the United States and the
• The Tax Cuts and Jobs Act lowered the top integrated tax rate on corporate
income distributed as dividends from 56.33 percent in 2017 to 47.47 percent
in 2020; the OECD average is 41.6 percent.
Joe Biden’s proposal to increase the corporate income tax rate and to tax
long-term capital gains and qualified dividends at ordinary income rates
would increase the top integrated tax rate on distributed dividends to 62.73
percent, highest in the OECD.
Income earned in the U.S. through a pass-through business is taxed at an
average top combined statutory rate of 45.9 percent.
• On average, OECD countries tax corporate income distributed as dividends
at 41.6 percent and capital gains derived from corporate income1 at 37.9
• Double taxation of corporate income can lead to such economic distortions
as reduced savings and investment, a bias towards certain business forms,
and debt financing over equity financing.
• Several OECD countries have integrated corporate and individual tax codes
to eliminate or reduce the negative effects of double taxation on corporate
In some countries, the capital gains tax rate varies by type of asset sold. The capital gains tax rate used in this report is the
rate that applies to the sale of listed shares after an extended period of time. While the integrated tax rate on dividends
captures subcentral taxes, this may not be the case for all integrated tax rates on capital gains due to data availability.