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![handle is hein.taxfoundation/srgbxz0001 and id is 1 raw text is: ON
October 1996,
No. 61
jea
Since 1950, small businesses have, on an
average anllual basis, paid about nine percent
of the income taxes imposed by the federal
government. ittre I shows the trend in these
total tax payments. labtle / reports the totals
and shares by typc of business structure
illustrated in Figure 1. On average over the
past 15 years, small ( corporations have paid
2.34 percent of all federal corporate income
taxes; small businesses not structtU-cd as c
corporations have paid 1 1.52 perceti of all
fedcral individual income taxes.
Small businesses are defined here to
include sole proprietorships, fairms, partjcr-
ships, S corpo)rations, and corporations having
assets of approximately $' 1 million or less in
constant 1994 dollars. Over the course of
forty-five tax years from 1950 to 1994 there
has been a large aimotnt of fluctuation in the
average income tax paid by such businesses.
These fluctuations have had three fundamen-
tal causes: changes in tax rates, changes in
the definition of taxable income, and trend
changes in the overall economy.
Figure 1
Total Small Business Federal Income Tax Collections by Type of Business, 1950-1994
(Billions of 1994 Dollars)
C C Corporations
Researc( Fel/ow,
Ta~x Folindalion
alI
Artbr 1. Ila/l, Ph.1).
Sentior hIconou/fsl
JUx Iounl(Idation
$70
$60
$50
a) $40
Cl)
C
.0 $30
$20
$10
$0
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