The relative importance of corporate income tax has fallen considerably since 1960. There are several reasons for this:

1. It is usually believed that most corporate taxes will be passed on to either employees in the form of lower wages, consumers in the form of higher prices, or stockholders in the form of lower returns on their investments. i.e. That that corporate taxes are easily shifted.2. It is very difficult to tax corporations that operate internationally. They can readily shift profits from one nation to another -- depending on where their taxes will be the lowest.

One way to increase corporate taxes is to impose a value added tax. This is essentially a sales tax on the value added to products and on services provided. It is generally felt that value added taxes would be more difficult for corporations to shift.