We finally reached the goal. How to chase investment in your country and the jobs away …
Japan’s cut in corporate tax rate, set to take effect April 1, will leave the U.S. corporate tax rate the highest in the world. Look at the chart above and see if you can spot the problem, as we strive to outdo Europe.
NEW YORK (CNNMoney) — On Sunday, the United States gets a distinction no nation wants — the world’s highest corporate tax rate.
Japan, which currently has the highest rate in the world — a 39.8% rate on business income between national and local taxes — cuts its rate to 36.8% as of April 1. The U.S. rate stands at 39.2% when both federal and state rates are included.
“The change in and of itself is not that important, but there’s some symbolism involved in being the highest in the world,” said Eric Toder, co-director of the Tax Policy Center, a non-partisan think tank…
You see, it is just symbolism. It doesn’t really matter if the US has the highest corporate tax rate in the world. What’s wrong with that, and think of all the taxes the government gets.
Still, both Democrats and Republicans argue that the corporate tax rate should be lowered as a way of promoting greater economic growth, so that multinational companies have incentive to invest more in their U.S. operations than overseas. President Obama has proposed cutting the corporate rate to 28%, Republican challenger Mitt Romney proposes a 25% rate.
The only difference being that Republicans actually want to lower the corporate tax rate, while the Democrats don’t. In fact, the Democrats want to raise the taxes on corporations still higher by doing away with deductions and creating a new ‘minimal tax.’
Both sides are in agreement for the need to reduce the loopholes and other exemptions that shield companies from paying taxes on all their income. That kind of reform could increase corporate tax collections, or at least leave them unchanged, even with a lower rate…
The Democrats want to do away with the very “loopholes and exemptions” that were put in place to encourage US companies to do business in the first place. And, yes, it is just another way to raise taxes.