It’s almost comical. No matter what the tax rules are for corporate America, the nation’s CFOs find ways to pay less than anybody imagined. Helping them along: Politicians who pass friendly tax laws then complain that businesses aren’t doing their fair share.

America’s corporate tax charade is on full display as President Biden tries to raise the business tax rate from 21% to 28%, to finance nearly $2 trillion in building and social-welfare plans. This comes after the Trump tax cuts of 2017 lowered the business tax from 35% to 21%. It was too high then, see, and it’s too low now. Biden wants to get it just right.

There’s a strong case for raising the corporate tax rate—if you think business taxes should be a meaningful source of federal revenue. It’s not clear we do, however. Corporate tax receipts (not including payroll taxes) were just 6.2% of federal revenue in 2020, while individual tax payments were 47% of federal revenue. The individual portion of federal revenue has been stable for decades, but the portion coming from business taxes has fallen from 23% in 1960 to 10% in 2000 to mid-single digits today.

There are valid reasons for the decline in business taxes, other than corporate feather-nesting. Congress, with bipartisan support, has passed a variety of corporate tax breaks over the years meant to foster innovation, trigger domestic investment and boost hiring. Globalization during the last 30 years has given big multinationals many nations to do business in. Many of those nations woo businesses with low tax rates, spawning the “race to the bottom” Treasury Secretary Janet Yellen recently excoriated.

The government’s corporate tax revenue took another downward step after the Trump tax cuts, falling by $92 billion, or 31%, from 2017 to 2018. As a percentage of federal revenue, corporate tax receipts dropped from 9% to 6.1%. Republicans said the lighter tax burden would ignite an economic boom and ultimately produce more government revenue, but neither happened. And the unpopularity of the 2017 tax cuts suggests they went too far politically, and perhaps economically.

A tax hike to offset tax breaks

Biden and many Democrats in Congress have a variety of plans for making business pay their “fair share” in taxes, although nobody agrees on what a fair share would be. In addition to simply raising the business tax rate, Ron Wyden of Oregon, chair of the Senate Finance Committee, has a plan to make American multinationals pay more tax on overseas earnings. Yellen is lobbying other advanced nations to adopt minimum business tax rates that are high enough to halt profit-shifting. If none of this works, Democrats want to hit big businesses with a minimum tax of 15% of profits reported to shareholders, to assure they don't skate.