The United States still relies, although less heavily than it did in the past, on revenues from the corporate income tax. While the tax is currently a distant third in share of federal revenues, trailing both the individual income tax and the payroll tax, it was much more important in the past. The corporate tax's decline as a share of federal revenues results from both the growth of other revenue sources and the decline of the corporate tax as a percent of GNP. This latter effect, in turn, arises from both a decline in corporate profits as a share of output and a decline in effective corporate tax burdens.

A separate corporate tax has been justified at various times by the special privileges the corporation receives (in terms of limited liability), the independent economic power obtained by large corporations, and the need to tax corporations in order to prevent the sheltering of income by high-income individuals given the complexities of partnership taxation. The corporation is a popular target for raising revenue, since it is not very visible. Finally, if one expects the tax to be paid by owners of capital, the tax may contribute to a more progressive overall federal tax system, an outcome that is desirable in some quarters.

Many of these arguments for retaining the separate corporate tax would be viewed with skepticism by most economists. Indeed, it has been primarily economists who have been the most critical of the corporate income tax, citing its creation of a variety of distortions.