The Corporate Tax Myth: How “Fair Share” Became a Pathway for the Wealthy to Accumulate More
If corporations paid the statutory rate on profits earned in the United States, the federal government would collect hundreds of billions of dollars more every year. Instead, taxpayers cover the gap.
Holly Springs, NC, Jan. 20, 2026 — For years, Americans have been told that lower corporate taxes are good for everyone, that they lead to more jobs, higher wages, and broader prosperity. It’s a comforting idea. It’s also one that no longer matches reality.
The truth is far simpler and far less flattering: the modern corporate tax system is structured to overwhelmingly benefit shareholders, not workers, and not the communities that make corporate success possible.
And while it’s all legal, that doesn’t make it right.
The Myth of the “Fair Share”
When people say corporations should “pay their fair share,” they’re not making a legal argument. They’re making a moral one.
They’re pointing out something basic: If a company benefits from public roads, public schools, public safety, a trained workforce, courts, infrastructure, and economic stability, then it should contribute meaningfully to maintaining those systems.
But the tax code does not operate on the basis of fairness. It operates on incentives — and those incentives overwhelmingly favor capital over labor.
How the System Really Works
The U.S. corporate tax rate is 21 percent on paper. However, in practice, many profitable corporations pay far less, sometimes nothing at all.
They do this legally through:
Accelerated depreciation and accounting write-offs
Stock-based compensation deductions
Loss carryforwards that erase future profits
Profit shifting to low-tax jurisdictions
Complex structures unavailable to small businesses
These mechanisms are not loopholes in the accidental sense. They are written into law.
The result is predictable: corporate profits have surged, while corporate tax contributions as a share of federal revenue have steadily declined. In effect, corporations succeed while the common taxpayer bears a greater burden.
Who Benefits? Not the Common Man.
When corporations reduce their tax bills, the savings do not flow to workers.
They flow to:
Share buybacks
Dividends
Executive compensation
Cash reserves
And who owns the stock?
The top 10 percent of Americans control nearly 90 percent of all corporate equity. The bottom half of the population owns almost none.
So when corporations pay less, the benefit goes overwhelmingly to the already wealthy, not to wage earners, not to families, and not to local communities.
The Cost of This System
When corporations don’t contribute, the burden doesn’t disappear. It shifts.
It shows up as:
Higher payroll taxes on workers
Greater pressure on state and local governments
Cuts to public services
Rising national debt
And most importantly, it shows up as a lost opportunity.
Because the reality is this: If corporations paid closer to the statutory rate on profits earned in the United States, the federal government would collect hundreds of billions of dollars more every year.
That money could:
Rebuild roads, bridges, and water systems
Expand access to healthcare and mental health services
Lower taxes on working families
Invest in education and job training
Reduce the national deficit
Strengthen domestic manufacturing and energy security
Instead, it is largely absorbed into shareholder returns and balance sheets.
The Part That Deserves Honest Accountability
Corporations didn’t design this system on their own.
Lawmakers did.
Both parties, over decades, have written a tax code that:
Rewards aggressive tax avoidance
Favors financial engineering over productive investment
Shifts the burden away from capital and onto labor
Corporations are doing what the law allows and what shareholders expect.
But pretending this outcome is accidental, or inevitable, is dishonest.
It is the direct result of political choices.
The Bottom Line
The current corporate tax system does not exist to help the average American get ahead. It exists to protect capital, reward scale, and maximize shareholder returns.
And as long as that remains true, the gap between what corporations can pay and what they do pay will continue to grow, along with inequality, public frustration, and distrust in the system itself.
This isn’t about punishing success.
It’s about recognizing that a tax code that allows billions in legally avoided taxes, while communities struggle to fund schools, infrastructure, and basic services, is not working as intended.
And the longer we pretend otherwise, the more expensive the consequences become.
About the Author
Christian A. Hendricks is the publisher and founder of Holly Springs Update, a local news publication covering Holly Springs, NC, and its surrounding area. From time to time, he shares his views on national, regional, and state issues. He can be reached via email at christian.hendricks@hollyspringsupdate.com.