Among the types of taxes in the world, corporate income tax usually accounts for a large part of the total tax revenue, and the tide rises with the increase of total GDP.
China and the United States, as the world's top two countries in terms of total economic output, have a total annual tax revenue of more than $2 trillion and more than $4 trillion, respectively. What is the total amount of corporate income tax collected each year?
United States: The proportion of corporate income tax revenue is not high
Globally, the U.S. remains one of the most attractive markets for businesses. According to data released by the U.S. tax department, by the end of 2023, the total number of U.S. domestic companies exceeded 30 million. Among them, California has more than 2 million registered companies, continuing to maintain its ranking as the first state in the United States in terms of the number of registered enterprises. In second place is Texas with more than 1.4 million registered businesses, with 1.2 million companies registered in New York and 1 million registered businesses in Florida. These five states account for nearly one-fifth of the number of companies registered in the United States.
There are 6 states in the United States that are exempt from paying state taxes in corporate income tax: Nevada, Texas, Washington, Ohio, South Dakota, and Wyoming. Among them, there are many preferential tax policies in Texas, which do not need to pay state personal income tax, only need to pay federal tax and sales tax, and the corporate sales tax rate is 8.25%. If the annual sales of the business do not exceed $1 million, it is not subject to tax.
In terms of the scale of American companies, there are about 4,000 local listed companies, of which Apple, Microsoft, Google, and Nvidia have a market value of more than $2 trillion, and Apple once exceeded $3 trillion. At present, there are more than 70 listed companies in the United States with a market value of more than 100 billion US dollars, and the United States accounts for 9 of the top ten companies with the highest market value in the world.
On the other hand, as the world's largest economic power, the United States has 38 companies with operating revenues of more than $100 billion, accounting for 38% of the world's total. If the annual revenue of enterprises is enlarged to 200 billion US dollars, there are still 12 companies in the United States, accounting for 4% of the world's total. Among them, the retail giant Walmart has an operating income of more than 610 billion US dollars, ranking first in the list of global enterprises for many years in a row.
Among the companies in the $200 billion revenue level, even the Costco at the end of the crane has a turnover of $227 billion, ranking 26th in the world. Looking at profits, among all companies in the United States, there are 346 companies with annual profits of more than $1 billion. The strength of the economy can be seen.
According to the latest tax policy, the U.S. corporate income tax rate is divided into two tiers. For small businesses with annual revenues of less than $250,000, the tax rate is 21%. For large businesses with annual revenues of more than $250,000, the tax rate is 28%. Among them, for small companies limited by shares and limited liability companies, the new tax law provides for a 20% reduction in profits for the types of companies that can transition to individual tax. The tax rate on foreign income of U.S. multinationals will be raised from 10.5% to 21%, with Big Pharma being the primary target.
Data shows that in the past 2023, the total amount of corporate income tax collected in the United States will exceed 420 billion US dollars, accounting for about 9% of the total tax revenue of the United States, which is not very high. In the United States, personal income tax is the main source of tax revenue, accounting for nearly half of the total income of the United States.
China: The number of business registrations is even larger
Compared with the United States, the number of registered enterprises in the mainland is larger, more than 57 million, of which 52 million are private enterprises, accounting for ninety percent of the total number of enterprises in the country, with an average of 27,000 new enterprises per year. From the perspective of registered provinces, the number of registered enterprises in Guangdong Province ranks first in the country, and the number of registered enterprises exceeds 8 million, providing solid support for stable growth and employment. Among them, the total number of private enterprises exceeded 7 million, and the vitality was highlighted. Overall, the number of registered enterprises in Guangdong, Jiangsu, Zhejiang, Shandong, and Shanghai ranks among the top five in the country.
According to the list of the top 500 Chinese enterprises released, the total assets of the top 500 enterprises in the mainland are 400 trillion yuan, the total revenue is 108.36 trillion yuan, and the minimum annual revenue is 47 billion yuan to squeeze into this list. Among the country's top 500 enterprises, 16 have operating revenues of more than 1 trillion yuan.
In mainland China, the corporate income tax rate for general taxpayers is 25%, which is the same for domestic and foreign-funded enterprises. Qualified small and low-profit enterprises will be levied enterprise income tax at a reduced rate of 20%, and high-tech enterprises that need to be supported by the state will be levied enterprise income tax at a reduced rate of 15%.
For the whole of 2023, the national corporate income tax will be 4,109.8 billion yuan, equivalent to 570 billion US dollars, down 5.9% from 2022. That's $150 billion more than the total corporate income tax collected in the United States.