Pressure to stabilize public finances
With federal debt approaching 100 percent of GDP and interest costs soaring, tax policy is poised for major reform by the late 2020s. The sunset of 2017’s Tax Cuts and Jobs Act will force Congress to reassess corporate and individual rates.
Table 1. Federal Revenue Composition (% of Total)
| Source | 2019 | 2023 | 2025 (f) |
|---|---|---|---|
| Individual Income Tax | 49 | 52 | 53 |
| Payroll Taxes | 36 | 33 | 32 |
| Corporate Income Tax | 7 | 8 | 8 |
| Other | 8 | 7 | 7 |
Source: CBO; Treasury.
Table 2. Effective Corporate Tax Rates (%)
| Country | 2017 | 2025 (f) |
|---|---|---|
| United States | 21 | 26 |
| OECD Average | 24 | 25 |
| Canada | 26 | 26 |
| UK | 19 | 25 |
Source: OECD Tax Policy Statistics 2025.
Policy outlook
Broader bases and minimum taxes on global income will replace headline rate cuts. Carbon and consumption-based taxes may emerge as new revenue streams.
Strategic implication
Corporates should model multiple fiscal scenarios and review R&D and energy credit eligibility. Tax strategy is becoming an integral component of competitive advantage.