Starting Next Month, the U.S. Will Have the Highest Corporate Tax Rate in the World
- Posted on March 16, 2012 at 4:00pm by
Becket Adams
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On April 1, Japan will cut its corporate tax rate to 36.8 percent from 39.5 percent.
You know what that means, right?
It means the United States will officially have the highest corporate tax rate in the world, with average combined federal and state profit levies of 39.2 percent.
“Yes, that’s higher than Sweden,” The Wall Street Journal reports. “Higher than Russia. And China, Mexico, Denmark and even France. Doesn’t it make you want to break out in a chant: U-S-A, U-S-A?”
As Japanese politicians found themselves staring down an increasingly burdensome deficit and an aging population, they came up with an idea: Cut the corporate profits tax to boost economic activity and generate higher revenues.
“The government approved an overall five percentage-point cut, which was delayed by last year’s earthquake and tsunami,” the Journal reports. “But the first installment arrives April 1 and in three years the rate will drop another 2.3 percentage points to 34.5 percent.”
The Journal report continues:
Japan‘s neighbors in Asia convinced Tokyo to act by luring investment from what used to be the world’s second-largest economy and is now the third, after the U.S. and China. Korea has cut its top corporate rate to 22 percent, Taiwan to 17 percent and Thailand is moving to 20 percent over the next two years. Hong Kong and Singapore have led the way with longstanding rates of 16.5 percent and 17 percent, respectively.
Japan is the latest country to act on the reality that high corporate taxes create “economic distortions.”
“Most obviously they encourage businesses to locate operations in other countries,” according to the Journal, “American liberals argue that most U.S. companies don’t pay the top federal statutory rate of 35 percent because of various loopholes and credits, but the high rate encourages multinationals to keep their profits overseas to invest there, rather than in the U.S.”
Moreover, higher corporate tax rates create incentives for businesses to seek tax-avoiding measures.
“For instance, because interest payments are tax-free, corporate taxes encourage debt as opposed to equity financing, making companies more vulnerable to interest-rate shocks and business downturns,” the Journal reports, “A mound of economic evidence also shows that high corporate rates result in lower compensation for workers.”
Still, for reasons unknown, the last two decades have seen nothing but inaction on the part of U.S. politicians even as the rest of the world has cut its corporate tax rates.
“Now almost everyone—even President Obama—agrees that it’s time to act,” the Journal notes.
“Mr. Obama unveiled a plan last month to chop the federal rate to 28 percent from 35 percent, but at the same time it would impose such a high penalty on U.S. firms with overseas operations that business groups rightly say the plan would be worse than doing nothing.”
The Journal report ends with this last bit of snark:
The last four years have seen numerous U.S. economic milestones—four years of trillion-dollar deficits, some $5 trillion in new debt, the loss of America’s AAA credit rating, three years of near-zero interest rates, postwar records for federal spending as a share of the economy, and now the world’s number one corporate tax rate.
Some conservatives say Mr. Obama doesn’t believe in American exceptionalism. Clearly he does.
(Front page photo source: ekantipur.com)
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Comments (136)
SpeckledPup
Posted on March 16, 2012 at 4:51pmno one ever stops to think that if obama murders all of our money-making EMPLOYING companies, so no one will have jobs, America will not be making anything, so no more paychecks, and where will American people get money to pay for anything let alone money to buy FOOD — that will have to be sold to us from OVERSEAS. obama wants to be able to SORT OUT who gets food and who does not.
obama’s plan is halfway accomplsihed thru into fruition… it is not just to break and ghetto and disarm America, but to divide us into bloodsoaked civil wars across all categories, and starve us into becoming a 3rd World disaster.
for these last 3 years alone and what he has done to this nation, obama should be arrested for High Treason and hung by the neck in the National Mall until he rots.
Report Post »youdidthis
Posted on March 16, 2012 at 4:56pmdo not forget his friends…
Report Post »Beckofile
Posted on March 16, 2012 at 7:04pmThere is no corp tax. It is a cost of doing business and is a line item in the total cost to produce a good or service. Then profit is put atop that and the customer pays the whole cost of production and profit. It is a VAT tax at best.
Report Post »marcus_arealius
Posted on March 16, 2012 at 7:46pm@beckofile : While it is possible for corporations to merely pass taxation onto the cost of goods and services, this cost is not without serious ramifications. especially in a weak economy. No matter how the accounting is perceived, taxes are a diversion of money from the private sector to a political sector which distributes the revenue according to political motives, not marketplace forces. Furthermore, there are limits as to how much cost a corporation can pass on to the consumer without risking loss of loyalty. There are volumes of books on this subject so I’ll defer further comment. The bottom line is taxation is government stealing, with the exception that some taxation is obviously necessary to run the constitutional obligations.
Report Post »TH30PH1LUS
Posted on March 16, 2012 at 8:01pmThe window to return to our Constitutional limited government has almost shut. I hope you have stored food, water, and ammunition.
Report Post »william 123
Posted on March 16, 2012 at 8:17pmAll I can say is ….this is what happens when you don’t do your homework and to coin an old Navy saying…“the stupid shall be punished”. hang on America it’s about to be a wild ride, cause in my opinion you haven’t see nothing yet!!
Report Post »canadianlady
Posted on March 16, 2012 at 8:41pmAgreed!
Report Post »youdidthis
Posted on March 16, 2012 at 9:00pmmarcus_arealius,
Report Post »ouch, heard that over here.
resme
Posted on March 16, 2012 at 9:29pmI‘m confused isn’t the corporate income tax supposed to go to “defense spending”?
Report Post »momsense
Posted on March 16, 2012 at 4:41pmSomeone slap Oozo upside the head and get his attention !
Report Post »db321
Posted on March 16, 2012 at 4:51pmDo you mean Obama Free Stuff – is not free!
We can lower taxes – re-elect Obama and he will cut all entitlement – now that he no longer needs their votes – just like every other dictator that ever got to power. Kiss up to the lazy – then destroy them.
Report Post »MCDAVE
Posted on March 16, 2012 at 9:14pmLast 31/2 yrs has been the biggest rip off of America in our history ..now the thieves are going to tax us into destruction….The American people are not going to accept this..
Report Post »Joker50
Posted on March 18, 2012 at 1:59pmUnfortunately, for some reason, no one in Washington has the balls to call him up on the carpet. The ******** in the Congress apparently are so afraid of him and his regime, they just all bend over and take anything he has to give. It is up to EVERY SINGLE AMERICAN who can vote, to really garner some CHANGE in Washington!!!!
Report Post »robinakilt
Posted on March 16, 2012 at 4:41pmAMEN! Protect the Tree!
Report Post »Bertram Jones
Posted on March 16, 2012 at 4:38pmWe’re No. 1…We’re No. 1.
Report Post »Way to go USA…Oh, I forgot , this is like golf, you want a low score.
Nevermind
youdidthis
Posted on March 16, 2012 at 4:45pmwe are number 1 , all others are number 2 or lower.
line from good movie…
Report Post »cannot remember name.
AvengerK
Posted on March 16, 2012 at 4:48pmThis is Obama’s idea of “fair share”.
Report Post »db321
Posted on March 16, 2012 at 4:54pmYea – but look at all the Yellow Tail Salamanders we save by not building a free Pipe Line that would have created 1000′s of Jobs and lowered our debt.
Report Post »youdidthis
Posted on March 16, 2012 at 5:06pmtexas lizard…shutting down wells, exploration.
Report Post »Gonzo
Posted on March 16, 2012 at 5:12pmNo, no we’re WINNING!
Report Post »robinakilt
Posted on March 16, 2012 at 4:36pmThis is what happens when you keep electing socialists (Republicans) and communists (Democrats). Our fore fathers fought communists, socialists and Marxists overseas in WW1 and WW2 and we will have no choice but to fight them here in America or watch it all go away. If standing up for FREEDOM AND LIBERTY makes big sis want to watch me, then watch away! I will Protect the Tree of Liberty!
Report Post »soybomb315
Posted on March 16, 2012 at 5:15pmThe founders fought a revolution over something like a 3% tax on the colonies. Here we are with government taxes taking over 20% of the GDP and rising FAST. Those taxes dont even cover the budget, as we have a $1Tillion annual deficit.
wake up the sheeple 2012
Report Post »Bertram Jones
Posted on March 16, 2012 at 6:04pmDon’t forget the current Fascist regime
Report Post »MrKnowItAll
Posted on March 16, 2012 at 4:34pmSee my Printing Press. I can’t even Print with it. Everything is Regulated. Ink. CAMERA CHEMICALS.
Report Post »Here is the TRUTH. For the Camera Chemicals we must buy their Disposal Kit. That Cost $159.00. It is 100% Baking Soda (Even Says so on the box). This brings down the PH and you can flush it. THE PROBLEM. You must buy this KIT. You cannot buy and use your own under $20.00 Baking Soda. Insanity is to nice of a word for what they are doing.
youdidthis
Posted on March 16, 2012 at 5:09pmit is obvious what they are doing…
ever thought of going rogue…?
Report Post »sorry , feel your pain…every thing is insane.
Salamander
Posted on March 16, 2012 at 4:32pmHey, you’ve got to pay for all those government employees somehow! Without the corporate tax, the economy will suffer horribly. Instead of all those useful salaries being used as a spending conduit to juice up the economy (and, perhaps shine up a few political campaigns as well), those funds would be wasted by the corporations, who obviously do not know what to do with their money! Did I get that right? Well, if it’s good for Obamanomics, it simply MUST be good for the country!
Report Post »2theADDLED
Posted on March 16, 2012 at 9:52pmEver heard the term “To Many Cheif’s And not Enough Indians”
Report Post »cessna152
Posted on March 16, 2012 at 4:26pmThe taxes are bad but the regulations are worse… Regulations are another form of tax and really stunt growth!
Report Post »JRook
Posted on March 16, 2012 at 4:24pm“Mr. Obama unveiled a plan last month to chop the federal rate to 28 percent from 35 percent, but at the same time it would impose such a high penalty on U.S. firms with overseas operations that business groups rightly say the plan would be worse than doing nothing.” Even the Journal can’t have it both ways. Higher taxes cause companies to move operations overseas….but slanting the tax system to favor companies to invest and develop jobs in the US is worse than doing nothing. Sounds like double speak for we like the EFFECTIVE corporate tax system in the US.
Report Post »Walkabout
Posted on March 16, 2012 at 4:39pmI do not know of any Fortune 100 companies without overseas facilities.
How can you compete without overseas offices?
The money made in a country should be taxed in that country & not multiple countries.
A world class manufacturer needs a full range of manufacturing facilities on each continent/region.
Report Post »AvengerK
Posted on March 16, 2012 at 4:52pmJROOK….Obama’s plan was an unworkable bait and switch. The taxes he wanted to add from overseas investments would have made these companies‘ taxes even higher than the rate they’re paying now. Rather than just cut the d@mn tax with no catches, he thought he could sneak it through while adding MORE taxes elsewhere. Obama’s contempt for Americans is staggering.
Report Post »M13
Posted on March 17, 2012 at 9:30amJRook lies all the time. Do not believe anything that idiot tells you.
Report Post »mwoakley
Posted on March 16, 2012 at 4:22pmNo wonder American companies are moving operations overseas to countries that have welcoming tax policies for
Report Post »progressiveslayer
Posted on March 16, 2012 at 4:21pmThey don’t get it because the public school monopoly has created economic illiterates.
Report Post »Constructionist
Posted on March 16, 2012 at 4:19pmAnd all the progressives at MSNBC and the NY Times chant, “We’re number one!”
Report Post »I.Gaspar
Posted on March 16, 2012 at 4:25pmYeah…and we chant “Obama’s Number Two!”
Report Post »CatB
Posted on March 16, 2012 at 4:35pmLOL .. Obama number two … too TRUE!
Report Post »Mark0331
Posted on March 16, 2012 at 4:37pmI also hear more and more people chanting “Barrys a ‘FN’ d**khead”…
Report Post »Randyrocker
Posted on March 16, 2012 at 4:18pmIn truth, nobody cares. Americans have become financial deaf, dumb and illiterate.
Report Post »hatchetjob
Posted on March 16, 2012 at 4:28pmIt seems that way. Whatever is dished out, we just take it.
Report Post »Walkabout
Posted on March 16, 2012 at 4:40pmObama will lose the argument about the American corporate tax rates. He’ll try to be nuance, but he will lose.
:)
Report Post »Mark0331
Posted on March 16, 2012 at 4:42pmWalk About—-your dead right, it happened on his watch, he owns this. He can’t stutter and spin his way out of this one.
Report Post »progressiveslayer
Posted on March 16, 2012 at 4:17pmThat’ll create lots of jobs,the Marxist POS needs to be fired in November,he was just a loud mouth community agitator who never had a job and he’s trying to run the largest economy in the world?
Report Post »If it wasn‘t so tragic I’d be laughing at the walking disaster in chief and the damage he’s done to our republic.FIRE THE MARXIST HEATHEN.
RinkyDink34
Posted on March 16, 2012 at 4:12pmSounds like Obama’s plan to bankrupt the U.S.A. is right on target; God Help U.S.
Report Post »TheBurningTruth
Posted on March 16, 2012 at 4:25pmSorry, “God helps those that help themselves.“ or how about ”Suicide is a Sin” and that includes economic suicide as well.
Report Post »Lloyd Drako
Posted on March 16, 2012 at 4:10pmWe shouldn’t have the highest corporate tax rate in the world, we should have the lowest. In fact, zero.
Why tax corporations at all? They simply pass the cost on to their customers in the form of higher prices, or to their shareholders in the form of lower dividends.
Tax individuals and only individuals. At the same time remove all, that is all, deductions, writeoffs, and loopholes. The home mortgage deduction, tax breaks for oil drilling, subsidies for green energy, charitable contribution writeoffs–all should go.
Then institute a flat(ter) rate structure. Not flat, but flatter. From hedge-fund managers to the poorest of the poor, make everyone pay, and let the chips fall where they may.
Report Post »TheBurningTruth
Posted on March 16, 2012 at 4:29pmThe problem with this approach is that it eliminates both the blame game and the ability of politicians to sell favors (back in medieval times those were called “indulgences”). Personally I agree 100% with everything you’ve said. But it will never come to pass because the Progressive Liberals have sold the idea that “nothing is your fault, it‘s always someone else’s fault”. If you have less it must be because someone with more stole it from you. It’s not about individual responsibility, it’s all about the collective.
We‘re just ants in the Progressive Liberals’ world
Report Post »youdidthis
Posted on March 16, 2012 at 4:48pmdo we actually need dc?
it is an illegal entity , just like barry obo.
Report Post »Lloyd Drako
Posted on March 16, 2012 at 5:56pmFirst, only a very badly managed corporation will pay 39.2%. It is a marginal rate to begin with, and corporate lawyers and accountants can always find ways of reducing whatever the effective rate is, by manipulating the tax code.
Second, I wouldn’t be so sure that progressive liberals will block such a reform once they understand its implications. Without taxes on corporations, which provide about 10% of federal revenue, you will have a good reason for raising tax rates on very wealthy individuals, who will no longer be able to get breaks for their shell corporations, charities, asset-shuffling off to relatives,and other tax dodges. A progressive’s wish-dream.
Third, I would propose such a reform as part of a grand bargain whereby corporations would no be counted as “persons” with regard to freedom of speech. I would let any individual contribute as much as he/she liked to political causes, on condition of full transparency, but bar entities such as corporations and unions from doing so.
Fourth, while we’re at it, we need a real clearing of the air with regard to “personhood,” not only for the sake of tax equity but also for obvious reasons having to do with the status of unborn life and women’s rights. Constitutional convention, anyone?
Report Post »Snowleopard {gallery of cat folks}
Posted on March 16, 2012 at 4:09pmAnother portion of Obamas agenda to destroy the nation across the board; so what else is new from the tax, tax, tax loving POTUS of the White House.
Report Post »youdidthis
Posted on March 16, 2012 at 6:35pmnailed it snow…
Report Post »youdidthis
Posted on March 16, 2012 at 4:09pmHomeland Security plans to build a high-risk virus research center in the heart of America
Report Post »http://www.infowars.com/homeland-security-plans-to-build-a-high-risk-virus-research-center-in-the-heart-of-america/
DividedWeFail
Posted on March 16, 2012 at 4:21pmJust what we need. NOT
Report Post »youdidthis
Posted on March 16, 2012 at 6:28pmsearch and see what they do on plum island.
Report Post »CatB
Posted on March 16, 2012 at 4:08pmObama will go out and cheer .. “we’re number one” … and his supporters are so dense they won’t understand that is a BAD THING!
Report Post »Mark0331
Posted on March 16, 2012 at 4:07pm..and Barry fiddles
Report Post »Mark0331
Posted on March 16, 2012 at 4:18pmBarrys‘ bs proposal is a way to seem ’tough’ in an election year….the guy is just not trustworthy.
Report Post »TexBork
Posted on March 16, 2012 at 4:07pm“Starting Next Month, the U.S. Will Have the Highest Corporate Tax Rate in the World” Under Obama? Shut the front door! Know phreaking weigh!
Report Post »youdidthis
Posted on March 16, 2012 at 4:07pmand you still think your govt is looking out for your best interests…?
Ron Paul 2012: We the People Have the Power
Report Post »http://www.youtube.com/watch?v=BQDowv4wD8U
Tri-ox
Posted on March 16, 2012 at 4:06pmIf we are to survive as a nation, obama must be removed from power.
Report Post »The_Almighty_Creestof
Posted on March 16, 2012 at 4:10pmAnd he will be…in 2016.
The twits we have running for a shot against him deserve a lot of praise for at least showing up to play. It’s just too bad the first string decided to punk out and sit on the bench.
Report Post »Walkabout
Posted on March 16, 2012 at 4:41pmThe_Almighty_Creestof
You pretty much said it all
Report Post »youdidthis
Posted on March 16, 2012 at 6:33pmRomney Crowds vs Ron Paul Crowds (Michigan Election 2012)
http://www.youtube.com/watch?v=fIP-ibpRYIY
somebody know something.
Report Post »youdidthis
Posted on March 16, 2012 at 4:04pmstrange things are afoot at the circle k.
http://www.youtube.com/watch?feature=player_detailpage&v=Wb9r0UrKSNc#t=757s
Foo Fighters – The Pretender
Report Post »http://www.youtube.com/watch?v=SBjQ9tuuTJQ
lukerw
Posted on March 16, 2012 at 4:03pmObamaNomics: Eat the Goose that lays the Golden Eggs!
Report Post »