American Corporate Tax Rates To Become Highest In The World

Something else that's going in the wrong direction. (HT Tax Prof Blog)



This won't help the recovery. From the Tax Prof Blog:

"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%, the U.S. has the second-highest overall rate among OECD nations. Only Japan, with a combined rate of 39.5%, levies a higher rate.

On April 1, both Japan and the United Kingdom are scheduled to lower their rates as well. Japan is planning to reduce its national rate by 4.5 percentage points, which will bring its overall rate to below 35%. The U.K. rate will fall from 28% to 27% as a first step of a multi-year plan to lower the British rate to 24% by 2014.

After the scheduled rate cuts in Japan and Great Britain take effect, the simple average of non-U.S. OECD nations will drop to about 25% percent and the weighted average will hit 29%. This will leave the U.S. rate a full 10 percentage points higher than the weighted average of our major economic competitors."

Unless our tax rates get lowered, Look for more jobs to go overseas as companies will look to invest elsewhere with regards to service centers, manufacturing plants, etc. It is becoming more evident that tax and spend is not a practical solution to the nation's economic woes. Tax cuts help everyone, not just "the rich".

Background Reading:

Tax Prof Blog: Tax Foundation: On April 1, U.S. Is #1 (World's Highest Corporate Tax Rate)