Washington Post Fact Checker: McCain’s Small Business Tax Claims Wrong.

“John McCain made two assertions on corporate taxes, one that small businesses pay 50 percent of the taxes and the other that U.S. corporations are among the highest taxed in the world. Both are wrong. All corporate income taxes–including giant corporations and the smallest of businesses–account for only about 14 percent of federal revenues raised in the year, according to the Congressional Budget Office. Most federal taxes are paid by individuals, while fees and other taxes make up the rest. While the official corporate tax is high, compared to other countries, there are so many loopholes in the code that many companies pay little or no taxes. The General Accounting Office reported recently that more than half of U.S. corporations paid no federal income taxes during the boom years of the late 1990s, and those that did were able to shelter much of their income, generally by claiming deductions and credits. The GAO report showed that 61 percent of U.S. corporations paid no federal income taxes from 1996 through 2000, a period of rapid economic growth and rising corporate profits. An estimated 94 percent of U.S. corporations reported tax liabilities amounting to less than 5 percent of their total income in 2000. Indeed, small corporations were more likely to avoid taxation than large ones, the GAO said.” [Washington Post, 10/15/08: http://voices.washingtonpost.com/fact-checker/2008/10/final_presidential_debate.html]