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  • Chart of the Week: U.S. Corporate Tax Rate Is Uncompetitive

    The U.S. is a worldwide business leader. However, high corporate taxes increase the difficulty for businesses to compete internationally in this age of globalization. Private investment in the U.S. can be increased if the federal statutory corporate income tax rate is reduced.

    According to Heritage analysts, the federal corporate rate matters for U.S. economic growth because all corporations’ investment decisions are influenced by the tax rate’s effect on a project’s rate of return. Additionally, it influences where multinational businesses decide to invest in new productive capital.

    In order to spur economic growth America needs to make corporate tax rates competitive. Currently, the U.S. is tied with Japan for the highest rates and has maintained rates significantly and consistently higher than the average of industrialized nations.

    This chart is part of Heritage’s 2011 Budget Chart Book, featuring charts on federal spending, revenue, debt and deficits, and entitlement programs.

    Posted in Scribe [slideshow_deploy]

    7 Responses to Chart of the Week: U.S. Corporate Tax Rate Is Uncompetitive

    1. Elsie says:

      Problem is, no matter what the corporate tax rate might be, it's what corporations pay that matters, not what the rate is. Bank of America had income of $4.4 billion, paid taxes of $0.00 and got a $1.9 billion handout from the taxpayers.

      • Corey says:

        Sorry, the posted corporate tax rate, whether a corporation pays it or not is inconsequential.

        The official corporate tax rate is weighted hugely on a investor all over the world, they see the lower corporate tax rate of China and our massive corporate tax rate and they will decide everytime to invest in China instead of the USA which means jobs and investment capital goto China instead of here, and that means unemployment grows here while unemployment falls in China.

        Its a pretty simple formula really. Worldwide investment capital follows the countries with the lowest corporate tax rate and the lowest level of regulations, which means in the most simple of terms Money goes to the most business friendly country and money leaves the countries that are most hostile to businesses, which means America.

        • David Skidmore says:

          Then foreign investors should be flocking to West Africa, where corporate taxes are low, regulation is minimal and unenforced in any case and people will work for almost nothing. And fleeing Germany's economy, which is heavily regulated. Obviously, they are not. The US as unfriendly to business? You must be kidding. Corporations own our politicians and largely write their own regulations.

      • Zack says:

        That's net income. You have to account for dividends paid and other costs. They actually lost 2.2 billion overall for the year.

      • Mickey G says:

        Corporations do not pay tax they collect them (unless they are losing money). Anyone that considers a corporate tax rate to be anything outside a competitive edge by being lower is foolish. Corporate welfare bull! Eliminate all corporate taxes and the personal income tax and collect all taxes from consumption based taxes and you will have a winner. Oh, and by the way, stop the welfare payements via the IRS called EITC.

      • Cost of Compliance says:

        You've completely glazed over the cost of tax compliance… the government does not file taxes on behalf of anybody, least of all corporate entities. To gain any benefit from the bizzaro-world labyrinth that is the US Tax Code, corporations have to pay small armies of accountations and tax lawyers. Even if tax breaks cancel out tax burdens, the cost of tax compliance remains.

    2. Tanisha Green says:

      Wonderful story on this just last night on "60 Minutes". It was a rerun, but right on the mark.

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