Although the U.S. has the highest corporate tax rate of any developed country beside the UAE (PDF) most major U.S. companies don’t pay anywhere near the 35% corporate income tax rate.
The New York Times reports that the effective tax rate of major corporations varies vastly by industry. American utilities pay a low 3.1% effective federal income tax rate, energy companies pay around 11.5% in federal income tax, and healthcare and retail pay more than 30% of their profits in tax.
Tax reformers say that the U.S. corporate income tax rate functions more like a strike-through price (something that looks high but rarely applies.)
More: “Profitable Companies, No Taxes: Here’s How They Did It,” Patricia Cohen.
Original study: “The 35 Percent Corporate Tax Myth,” Institute on Taxation and Economic Policy.