Monday, March 14, 2011

In 2 Weeks USA Will Be #1 for OECD Tax Rates

Corporate Tax Rates in OECD Countries
Country2010 Rate2010 Rank2000 Rate2000 Rank
Japan39.54%140.87%3
United States39.2239.36
France34.43337.767
Belgium33.99440.24
Germany30.25521
Mexico3073511
Spain3093513
Australia3063414
New Zealand3083316
Canada29.521042.572
Luxembourg28.591137.458
United Kingdom28133023
Norway28122826
Italy27.514379
Portugal26.51535.210
Sweden26.3162827
Finland26172924
Netherlands25.5183512
Austria25193415
Denmark25203218
Korea24.22130.820
Greece2422405
Switzerland21.172324.9328
Turkey20243317
Czech Republic19253119
Poland19273022
Slovak Republic19282925
Hungary19261830
Chile17291531
Iceland15303021
Ireland12.5312429


"There is increasing recognition in Washington that the U.S. corporate tax rate is out of step with the lower tax rates of most industrialized and emerging nations. Indeed, 2011 marks the 20th year in which the U.S. statutory tax rate has been above the simple average of non-U.S. countries in the Organization for Economic Cooperation and Development (OECD).  It is now well known that with a combined federal and state corporate tax rate of 39.2 percent, the U.S. has the second highest overall rate among OECD nations (see chart above). Only Japan, with a combined rate of 39.5 percent, levies a higher rate.

The U.S. is less than a month away from having the highest overall corporate tax rate in the industrialized world, when Japan lowers its top rate on April 1. Remarkably, 2011 marks the 20th year in which the statutory U.S. corporate tax rate has exceeded the simple average of the non-U.S. OECD nations and the twelfth year in which our rate has exceeded the weighted average OECD rate. 

Already this year, Canada has lowered its corporate rate in a bid to have the lowest rate among the major G-7 nations. Great Britain too is scheduled to reduce its rate on April 1 in order to avoid losing more corporate headquarters to low-tax jurisdictions such as Ireland, Switzerland, and the Netherlands."

HTs: Instapundit, Newsalert, and TaxProf

18 Comments:

At 3/14/2011 10:37 PM, Blogger SBVOR said...

When it comes to Federal Corporate Tax, the USA already has the highest rate. France is #2!

Click here for the source (the same organization Dr. Perry cited).

 
At 3/15/2011 6:49 AM, Blogger bob wright said...

Meanwhile, politicians continue to pick and choose which companies shall render under to Caesar that which is Caesars.

This gives politicians power and makes the corporate income tax arbitrary and capricious.

 
At 3/15/2011 8:51 AM, Blogger Hydra said...

The nominal rate is a lot different from the effective rate.

 
At 3/15/2011 9:45 AM, Blogger Mrs. X said...

Hear that giant sucking sound?

 
At 3/15/2011 10:27 AM, Blogger Buddy R Pacifico said...

What would happen to U.S. foreign corporate earnings, if the U.S. Corp. tax rate was dramatically lowered?

Earnings that had been kept in foreign subsidiaries would be substantially repatriated to the U.S. -- as evidenced by this study.

The American Jobs Creation Act of 2004 temporarily implemented an effective tax rate of 5.25%. Major portions of previous foreign holdings would be used as:

(24%) U.S. Capital Investment.

(23%) Hiring & Training U.S. Employees.

(15%) U.S. based R&D.

 
At 3/15/2011 11:03 AM, Blogger Benjamin said...

Yet corporate income taxes has nearly become insignificant as source of federal taxes, now less than 10 percent.

Why not just wipe out corporate income taxes, and replace with luxury taxes?

 
At 3/15/2011 12:34 PM, Blogger Rufus II said...

x

 
At 3/15/2011 12:36 PM, Blogger Rufus II said...

So far this year the "effective" corporate tax rate is approx. 6%.

 
At 3/15/2011 12:44 PM, Blogger SBVOR said...

Pinhead Benjamin sez:

"Why not just wipe out corporate income taxes, and replace with luxury taxes?"

Been there, tried that...
The wealthy quit buying yachts and the middle class who built the yachts got slaughtered.

Why not cut Federal spending by no less than 50%? Start by eliminating ALL Federal entitlement programs (including the big three). The US Constitution does NOT authorize ANY such spending!

 
At 3/15/2011 1:34 PM, Blogger Ron H. said...

"Why not just wipe out corporate income taxes, and replace with luxury taxes?"

"Pinhead Benjamin" he calls you. It has a nice ring to it. are you OK with this new appellation?

You made a good start with this suggestion, but you should have stopped after the first iteration of the word "taxes".

 
At 3/15/2011 2:39 PM, OpenID Tim Trader said...

The nation is an economic mess. Years of irresponsible largesse followed by the recession & the bailouts has created a portfolio of mammoth debt.

How does a government raise money?

Taxes...

Politicians are in a conundrum...

Tax individuals & you'll be unpopular and get kicked off the gravy train (i.e. lose your next election).

Tax corporations... there's a winner! They have no vote... the uneducated masses see them as undeserving cash cows so it's a "popular" thing to do.

So the dairy cows are viewed as just a few pounds of beef.

Nothing new here either. Children are brought up hearing moralising stories of the stupidity of eating your milk-giving cow or killing the golden egg laying goose.

 
At 3/15/2011 3:03 PM, Blogger Benjamin said...

SBVOR/Ron H.-

When people call me a "pinhead" I assume it is because they think I am so sharp!

I prefer consumption taxes over income taxes. So did Milton Friedman, and do most classical economists. This is a bona fide conservative position, not some Republican Party wet poop.

I would also cut federal spending, but probably I would start with out coprolitic, parasitic military-foreign-VA bureaucracy, that now sucks down $1 trillion a year out of the private jobs- and wealth-creating sector.

And yet in 10 years, after we have taxed $10 trillion away from the hard-working and patriotic American people to finance the military monster, I can assure you that the Pentagon and hangers-on will tell us that the world is ever more precarious, that their equipment is hopelessly aging, that recruitment problems are mounting, and they they need even more money. Ever more money.
No matter how much money we throw at international problems, they will outlive all of us.

The War on Drugs, the War on Terror and Foreign Enemies, and the War on Poverty--all wars designed to be lost, not won.

That way you get even more money from taxpayers the next year!

 
At 3/15/2011 3:55 PM, Blogger Junkyard_hawg1985 said...

The Heritage Foundation presented this data a couple of months ago in a beautiful graph Here.

 
At 3/15/2011 4:03 PM, Blogger Buddy R Pacifico said...

Rufus states:

" far this year the "effective" corporate tax rate is approx 6%."

Rufus, is that a prorated figure based on a percentage of the year that has passed so far? If not, then what is the derivation of your figure of 6%?

 
At 3/15/2011 4:05 PM, Blogger Buddy R Pacifico said...

J_hawg..., nice link, thanks!

 
At 3/15/2011 4:33 PM, Blogger Dr. T said...

@Benjamin said: "... Why not just wipe out corporate income taxes, and replace with luxury taxes?"

I agree with the first part of the sentence, but why would we need federal and state luxury taxes? Almost all states and localities impose sales taxes: if a woman buys a $50,000 mink coat in Memphis, she'll pay $4,625 in sales taxes. Our governments already get too much of our money.

I noticed that corporate taxes (hidden consumer taxes) are popular among democracies and republics: you have to go to #25 on the list before the corporate tax rate is less than 20%. Germans and French are heavily taxed: in addition to the high corporate taxes they both have high Value Added Taxes (19% and 19.6%) and income taxes (top rates of 45% and 42%).

 
At 3/15/2011 4:45 PM, Blogger Benjamin said...

Dr. T-

Again, I favor consumption over income taxes. I prefer never to tax productive behavior, such as working or investing.

I also favor eliminating the federal Department of Education, Labor, VA, USDA, Commerce and cutting military outlays by 75 percent.

If I could I would legalize sidewalk pushcarts and jitney cabs everywhere in America.

Well, that and $2 will get me a cup of coffee.

 
At 3/15/2011 6:32 PM, Blogger SBVOR said...

Bejamin sez:

"When people call me a 'pinhead' I assume it is because they think I am so sharp!"

Only a true pinhead would think the head of a pin is sharp. But, you're known for getting just about everything ass backwards.

 

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