Convergence and the Great Divergence. The federal corporate income tax was instituted in 1909 and is generally estimated to be borne by shareholders and thus basically progressive. As shown in Figure 2.14, the top corporate tax rate has risen and fallen in the familiar U-shape curve, rising steadily from 1 percent in 1909 to its peak of 53 percent in 1968–1969, then falling from 1970 to 2018, when President Trump’s tax cut sharply lowered it to 21 percent, the lowest rate in eighty years.
