Woohoo! We’re Number One! We’re Number One!
America now has the highest corporate tax rate of all developed nations.
Wow. Yay for us.
Japan had been #1, but they dropped their rate 5%. Why?
Japan will cut its corporate income tax rate by 5 percentage points in a bid to shore up its sluggish economy, Prime Minister Naoto Kan said here Monday evening.Companies have urged the government to lower the country’s effective corporate tax rate — which now stands at 40 percent, around the same rate as that in the United States — to stimulate investment in Japan and to encourage businesses to create more jobs. Lowering the corporate tax burden by 5 percentage points could increase Japan’s gross domestic product by 2.6 percentage points, or 14.4 trillion yen ($172 billion), over the next three years, according to estimates by Japan’s Trade Ministry.
Japan’s sluggish economy currently has an unemployment rate around 5%, in case you’re keeping score.
This blog has long been in favor of completely eliminating the corporate tax in America. Corporate taxes are merely an effort by the government to disguise the actual personal tax rate. All corporate taxes are passed on to the individual in one way or another. Eliminating corporate taxes would be a boost for transparency in government and would be like giving the economy about 12 double espressos.
From the CATO Institute:
It’s also worth noting that the average corporate tax rate in Europe has now dropped to less than 24 percent, so even welfare states have figured out that a high tax burden on business doesn’t make sense in a competitive global economy.
Sometimes you can fall farther behind if you stand still and everyone else moves forward. That’s a good description of what’s happening in the battle for a pro-growth corporate tax system. By doing nothing, America’s self-destructive corporate tax system is becoming, well, even more destructive.
Others in the world are starting to see the relationship between a growing economy and corporate tax rates. South Korea’s is 24%. Germany is 29%. Still too high, but headed in the right direction. Our government doesn’t care. President Barack Obama (D-USA) is anti-capitalist, anti-populace, and anti-transparency. He will do anything possible to continue to hide the ever increasing encroachment of the government over our personal lives.