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Testimony of Scott A. Hodge
President, Tax Foundation
Senate Budget Committee Hearing
“Ending a Rigged Tax Code: The Need to Make the Wealthiest People
and Largest Corporations Pay Their Fair Share of Taxes”
March 26, 2021
Chairman Sanders, Ranking Member Graham, and members of the Committee. Thank you for the
opportunity to testify before you today.
There is no objective standard for what defines “fair share”; it is a purely subjective concept. But
there are facts, which are objective, and the facts suggest that the U.S. tax and fiscal system is very
progressive and very redistributive. These facts are contrary to popular opinion and contrary to the
premise of this hearing.
Internal Revenue Service (IRS) data indicates that the wealthy in America are bearing the heaviest
share of the income tax burden than in any time in recent memory. On the other hand, more than
53 million low- and middle-income taxpayers pay no income taxes after benefiting from record
amounts of tax credits, and six out of 10 households receive more in direct government benefits
than they pay in all federal taxes.
Meanwhile, the U.S. tax system is one of the most “business dependent” systems anywhere as
American businesses pay or remit 93 percent of the nation’s taxes. Economic studies show that
workers bear at least half of the economic burden of corporate taxes through lower wages, with
women, the low-skilled, and younger workers impacted the most. And because the corporate
income tax is the most harmful tax for economic growth, raising the corporate tax rate would not
only slow the economy, it would also make the U.S. an outlier once again against our global trading
Let’s dive into the facts.
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The Rich Bear America’s Tax Burden
Most Americans would be surprised to learn that a 2008 study by economists at the Organisation
for Economic Co-operation and Development (OECD) found that the U.S. had the most progressive
income tax system of any industrialized co