Corporate Income Taxes

Who bears the brunt of corporate income taxes. If you are a liberal, you would probably say wealthy industrialists.

Here's a paper from the US Department of Treasury (HT Taxprof) detailing who actually pays and it's not the rich.

Excerpt

Who ultimately bears the burden of the corporate income tax plays an important role in the distributional analysis of tax policy. Distributional tables often assume that the incidence of the corporate income tax falls on the owners of capital but there is considerable uncertainty amongst economists about who bears the burden of the corporate income tax. This paper reviews the evidence on the incidence of the corporate income tax, especially in light of recent empirical studies that focus on the relationship between the corporate income tax and wages. While further research is necessary to draw definitive conclusions, these studies suggest that labor may bear a substantial burden from the corporate income tax. These empirical results are consistent with computable general equilibrium models based on an open economy in which a single country sets its tax policy independently of other countries; in these models, assumptions that capital is mobile and consumers are willing to substitute tradable goods produced in different countries imply that labor can bear more of the incidence of the corporate tax than capital bears. Evidence on the degree of capital mobility across countries and the sensitivity of corporate investment to changes in tax policy also corroborate the possibility that the corporate income tax lowers wages by reducing the productivity of the work force. In addition to changes in productivity associated with changes in capital intensity, labor may also bear part of the corporate income tax if wages are determined in a bargaining framework since the corporate income tax may change the equilibrium wage bargain. Overall, the recent empirical evidence, the open economy computable general equilibrium models of tax incidence, and the sensitivity of the amount of capital investment within a country suggest reconsidering the assumption that the corporate income tax falls on the owners of capital; labor may bear a substantial portion of the burden from the corporate income tax.

If you want to read the report click here.