The Senate passed a tax bill last weekend. The details must be ironed out in conference negotiations with the House, but the plan includes a corporate income tax overhaul. This was a campaign promise of President Trump, and is long overdue.

The corporate income tax does not apply to all businesses, only those organized as corporations, which include most recognizable national businesses. Washington currently taxes corporate income above a modest threshold at 35 percent, the highest rate of any developed nation. The top rate will fall to 20 percent, in line with other countries. Our rate is high now in part because we are one of three developed nations not to have cut corporate taxes since 2000.

The U.S. also currently taxes profits earned by the international subsidiaries of American firms, as opposed to just domestic earnings. The 35 percent rate, less any taxes paid to another nation, essentially applies to all earnings everywhere. The Senate bill would end worldwide taxation.

The corporate income tax affects many business decisions. The tax has fueled corporate inversions, which is when an American company reincorporates in another nation. Burger King and Fruit of the Loom, for instance, have renounced their American corporate citizenship.

Inversions are for tax purposes and do not move all operations or even the headquarters overseas, but are still troubling.

American companies also keep significant earnings overseas, perhaps as much as $2.6 trillion, to avoid our taxes. The Senate bill allows repatriation of these profits with payment of a 14 percent tax. Lowering our top rate and ending worldwide taxation should end this problem.

Few companies, though, pay the full corporate tax. The Government Accountability Office found that around 70 percent of all corporations – and 20 percent of the most profitable – pay no corporate tax in a typical year, due to tax breaks. The corporate tax has raised about 10 percent of Federal tax revenue since the 1980s, versus 30 percent in the early 1950s. We do not really rely on the corporate income tax to fund Washington.

Modest revenue generation does not imply no harm to our economy. The tax particularly impacts companies unable to secure breaks from Congress. And when CEOs focus on avoiding corporate taxes, they are less likely to improve their products and services or lower costs. A focus on avoiding taxes slows economic growth.

Many Americans, I think, still like the idea of making rich corporations pay. Only the corporate tax does not ensure this. Taxes often get shifted, meaning that the people sending a check to the government may not really pay the taxes. Consider the example of gas taxes, which gas stations “pay.” Higher taxes generally increase the pump price, effectively passing on some of the tax to drivers. The potential for tax shifting makes the analysis of who really pays taxes relevant and challenging.

Appearances can be deceiving, and politicians count on this with corporate taxes. As Nobel Prize winning economist Joseph Stiglitz writes in a textbook, “Politicians like to give the impression to voters that someone else pays the corporate tax. But the reality is that households, workers, consumers, and investors pay the tax, just as they pay any other tax.”

Economists are unsure who really pays the corporate tax, partly because the answer depends on many factors. Candidates include a corporation’s customers, its workers, and investors across the economy. Even if the owners pay, which is likely at least in part, not all stockholders are rich. Many Americans own stocks through pension plans.

I personally believe that we should keep taxes and spending low. When we tax ourselves, I think that we should use taxes with clearly understood incidence. This makes the burden of government transparent, encouraging informed decisions by citizens.

The corporate income tax fares poorly in this regard. The tax today is like a con game, one riddled with exemptions for privileged firms. Reform is long overdue.

Daniel Sutter is the Charles G. Koch Professor of Economics with the Manuel H. Johnson Center for Political Economy at Troy University.