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  • The U.S. Does Have World's Second Highest Corporate Tax Rate

    Every Thursday Foundry editor Conn Carroll reviews the latest stories in the conservative and liberal blogospheres for Bloggingheads.tv‘s “This Week in Blog“. This week the show included a discussion below about taxes including the assertion that the U.S. has the world’s second highest corporate tax rate and that Barack Obama’s new economic adviser Jason Furman, supports lowering the corporate tax rate:

    Now fellow “This Week in Blog” contributor Bill Scher has a post up at Campaign for America’s Future arguing that these assertions are “not so.” His evidence? First he quotes an op-ed Furman wrote for Brookings:

    The United States has the second highest corporate tax rate of the 30 countries in the Organization of Economic Cooperation and Development (OECD). But because the United States has so many generous special tax preferences for businesses, it collects the fourth lowest corporate tax revenues as a share of GDP among all OECD countries.

    Next he cites another Furman op-ed supporting Rep. Charlie Rangle’s (D-NY) tax bill which lowers the corporate tax rate from 35% to 30.5%.

    Scher then writes: “So the next time you hear some of these factually flimsy conservative talking points, remember: America has the fourth-lowest effective tax rate. And no one on Obama’s economic team embraces McCain’s tax proposals.”

    But no one ever said the U.S. has the world’s highest “effective” corporate tax rate. Thanks to liberals in Congress who want to pass things like “Patriot Employer Act“s it should be no surprise that huge corporations exploit an overly complicated tax code to the detriment of most Americans. And no one ever said Obama’s advisers support John McCain’s tax plan. But Furman, contrary to his new boss Barack Obama, does support lowering the corporate tax rate. And that is still 100% true.

    Posted in Economics [slideshow_deploy]

    7 Responses to The U.S. Does Have World's Second Highest Corporate Tax Rate

    1. Dan Ancona, Earth says:

      Weak!

    2. Pingback: » Taxing Like It’s 1978 » The Foundry

    3. Charlie Quimby says:

      Saying the U.S. has the "world's second highest corporate tax rate" instead of the "fourth-lowest effective tax rate" is deliberately misleading. It's like answering the question, "how much did you pay for that?" with "the MSRP is $5,000" — when the street price is really 30% less.

    4. Jeremy, Minneapolis says:

      So let me get this straight. If our oh-so-onerous corporate tax rate results in the 5th lowest overall per capita tax intake among 30 OECD nations, what exactly would be the point of cutting it? I'm not sure why conservatives would want to change what has thus far been such an effective tax-reduction policy.

      There's a sucker born every day who will fall for This, the flimsiest kind of all "facts," one that allows you to say something "true," and totally mislead someone on what reality is at the end of the day. Totally agree with the MSRP comment.

    5. EJ says:

      "If our oh-so-onerous corporate tax rate results in the 5th lowest overall per capita tax intake among 30 OECD nations, what exactly would be the point of cutting it?"

      It's because firms make decisions on the margin. The choice of say building a new factory in the US is not based on the firm's total effective tax rate, but what the marginal rate of taxation is on that new activity, which is the second highest in the world. That's why. Furthermore, the effective tax rate is not universal. Certain firms and certain industries get more breaks then others.

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    7. Pingback: Twelve Progressive Policies That Make the Rich Richer and the Poor Poorer | Rogue Operator

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