Tags: Study US Corporate Tax Rates Soon Highest

Study: US Corporate Tax Rates Soon Highest

Monday, 14 Mar 2011 01:31 PM

U.S. corporate tax rates are on track to be the highest in the industrialized world, at 39.2 percent of corporate profits. If Japan follows through on its plan to cut rates next month, the United States will have the highest, according to a new study by the Tax Foundation, a Washington, D.C., policy group.

The foundation bases its conclusion on comparing U.S. rates to countries in the Organization for Economic Cooperation and Development (OECD), the group of 34 advanced countries with economies most comparable to the United States. Japan’s current rate is 39.5 percent.

“United States companies are now in the position of trying to compete in the 21st century world economy with a 20th century tax system,” said Scott Hodge, president of the Tax Foundation.

Dozens of countries have cut corporate taxes over the past few years to attract increasingly mobile corporations. Between 2000 and 2010, nine countries cut their corporate tax rates by double-digit figures: Germany, Canada, Greece, Turkey, Poland, the Slovak Republic, Iceland, and Ireland. All nine fell considerably in the OECD rankings of high-tax countries, the Tax Foundation reports.

“Dozens of countries around the world — including many of the United States’ closest trading partners — have realized that sky-high corporate tax rates are an economic dead end. Now more than ever, Americans want to see policies that will help create increased growth, more jobs, and higher standards of living, exactly the things that a lower and more streamlined corporate tax system can help achieve,” Hodge said.

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President Barack Obama
In December, U.S. corporate leaders dining with President Barack Obama reportedly asked for a tax “holiday” that would let me repatriate more than $1 trillion in earnings now held offshore, largely money they have earned from foreign sales.

Corporations regularly dodge tax rules to bring money home at lower rates and sometimes shop for tax homes that allow them to keep more earnings, trends against which Obama has taken public stands.

Under a 2004 tax holiday, corporations were able to bring home earnings at a rate of 5.25 percent, reports Bloomberg News.

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U.S. corporate tax rates are on track to be the highest in the industrialized world, at 39.2 percent of corporate profits. If Japan follows through on its plan to cut rates next month, the United States will have the highest, according to a new study by the Tax Foundation,...
Study US Corporate Tax Rates Soon Highest
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