Corporate income tax as a percentage of gross revenues reported to the IRS (2008):
United States: 12.9%
Virginia: 17.3%
Source: Internal Revenue Service Data Book (2008), Table 5.
Question: What does this tell us? How do we explain the fact that corporations account for a disproportionately large share of the federal income tax take in Virginia than in the United States as a whole? The same federal tax code applies across the country. Do Virginia certain industries disproportionately benefit from special tax breaks analogous to the oil depletion allowance? Alternatively, do Virginia businesses pay higher taxes because they are more profitable? Or, another theory: Do Virginia businesses pay higher taxes simply because we have more large tax-paying corporations domiciled in the state?
I’d like to see you braniacs out there weigh in on the issue. Perhaps you can bring some relevant data or analysis to bear.