Twenty-five Years of Effective US and Foreign Tax Rates for Large and Small Firms and their Effect on EPS

Abstract

Corporate tax law reform continues to be an important topic in the political arena, especially with the US having one of the highest marginal tax rates in the world. This paper examines twenty-five years of effective US and foreign tax rates for both large and small firms from 1990 to 2015. One of our major findings is that the effective tax burden on most US corporations is not nearly as heavy as the statutory law suggests. Our results suggest that future tax policy should consider both effective US tax rates and statutory tax rates when implementing new corporate tax laws.