The Trump corporate income tax cuts are the latest in a decades-long trend of tax reductions that have been substantially reversed mainly during times of war.
The historical evidence is revealing.
When the federal corporate income tax began in 1909, it was about as low as it could be — a rate of only 1 percent of corporate profits. Over more than 100 years, it has followed a broad hump shape, increasing for about half a century, and then decreasing for about the next 50 years.
The corporate tax rate peaked in 1968 at 52.8 percent. The Tax Cuts and Jobs Act of 2017 brought the 2018 rate down to 21 percent from 35 percent last year.
Wars provided an impetus for tax increases, with major hikes during both world wars and the Korean War. Corporate taxes remained high for more than 30 years, then dropped sharply under President Ronald Reagan and now, again, with President Trump.
