Back in September 2008, during a presidential debate, Republican candidate John McCain declared: "American business pays the second-highest business taxes in the world, [at] 35%." Democrat Barack Obama, countered that, while on paper corporate taxes look high, "there are so many loopholes that have been written into the tax code that…we actually see our businesses pay effectively one of the lowest rates in the world."
Both were right—and wrong. Obama was right that loopholes make the effective tax rate paid by U.S. corporations much lower than the top statutory rate of 35%. But far from paying one of the lowest effective tax rates, U.S. corporations pay the second-highest among major industrial nations, as McCain suggested.
The country with the highest rate by far: Japan. Farther down, the U.S. leads a crowded field, with France, Germany and the U.K. not far behind. But the U.S. rate is noticeably higher than its neighbor Canada's, and—what might surprise many—Sweden's.
Perhaps most surprising: Despite the recent media reports on General Electric's paying no tax domestically in 2010, U.S. multinationals actually pay a higher ETR than do U.S. domestic corporations.
It also turns out that the U.S. is not the only country creating high-paying work for corporate tax accountants and attorneys, who exploit tax loopholes. Most nations show huge differences between the top statutory tax rate on corporations and the effective rate paid.
Source: http://online.barrons.com
Both were right—and wrong. Obama was right that loopholes make the effective tax rate paid by U.S. corporations much lower than the top statutory rate of 35%. But far from paying one of the lowest effective tax rates, U.S. corporations pay the second-highest among major industrial nations, as McCain suggested.
The country with the highest rate by far: Japan. Farther down, the U.S. leads a crowded field, with France, Germany and the U.K. not far behind. But the U.S. rate is noticeably higher than its neighbor Canada's, and—what might surprise many—Sweden's.
Perhaps most surprising: Despite the recent media reports on General Electric's paying no tax domestically in 2010, U.S. multinationals actually pay a higher ETR than do U.S. domestic corporations.
It also turns out that the U.S. is not the only country creating high-paying work for corporate tax accountants and attorneys, who exploit tax loopholes. Most nations show huge differences between the top statutory tax rate on corporations and the effective rate paid.
Source: http://online.barrons.com
No comments:
Post a Comment