The corporate tax rate has dropped to a historic low of 21.5%, according to new data from the Internal Revenue Service.
The tax cut was announced last month as President Donald Trump sought to boost corporate profits and tax revenues.
The average effective corporate tax rates have fallen from 33% to 16% since 2001.
That’s the first time in US history the average effective tax rate fell below 17%.
Trump announced the tax cuts in a speech to Congress last month.
In a statement Wednesday, the Trump administration said: “This is a major victory for hardworking Americans and a historic first step in the rebuilding of our economy and our country.”
Trump and congressional Republicans have been calling for an increase in the corporate tax.
The IRS said the corporate rate has fallen to 17.8% from 17.9% last year.
That rate is lower than the average corporate rate of 26.8%.
Trump said in February he would seek an increase of 10% in the tax rate, which was 17.5% at the time.
The corporate tax has historically been a key tool for tax cuts.
Tax experts say that’s why the corporate sector’s share of US GDP has risen since the Reagan tax cut of 1986.
But the US economy has grown at a slower pace than the rest of the developed world since then.
The US economy grew at just 3.6% in 2017, the slowest pace of the 20 countries with comparable data.
The Treasury Department said Wednesday that it will cut corporate tax revenues by an estimated $2.3 trillion over the next 10 years.
The tax cut is the first major tax relief to be implemented by the Trump White House.
The US corporate tax cut will increase the effective corporate rate to 21.6%, up from 21.4%.
That’s less than the 20% effective rate on the previous tax cut signed by Trump.
The effective tax rates will drop as the rate of tax increases from 21% to 17% will slow, the IRS said.
Tax rates can be reduced by repealing deductions, credits, and exclusions that favor certain types of businesses and corporations.