Business Organizational Choices: Taxation and Responses to Legislative Changes (CRS Report for Congress)
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| Release Date |
Revised April 26, 2012 |
| Report Number |
R40748 |
| Report Type |
Report |
| Authors |
Mark P. Keightley, Analyst in Public Finance |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
This report summarizes the general tax treatment of corporate and pass-through businesses andanalyzes the most recent business data from the Internal Revenue Service (IRS). Analysis of thedata shows that the majority of businesses in this country are small. The analysis also reveals thatmost businesses are of the pass-through variety, which raises the likelihood that a large fraction ofbusinesses are taxed according to the individual tax system, not the corporate tax system.Businesses that do pay the corporate income tax (i.e., C corporations) are, however, much largerand account for the majority of business activity, which indicates that their share of business taxespaid is likely higher than non-corporate entities. Extending the analysis back to 1980 makes itclear that the pass-through forms of organization have increased in popularity over time at theexpense of the corporate form.Bills: S. 2343
