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US Corporate Tax Rate Is Now The Highest

From CNN’s Money.Com:

U.S. corporate tax rate: No. 1 in the world

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.

By Chris Isidore
March 27, 2012

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.

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.

For example, President Obama wants to impose a minimal tax on the overseas profits of U.S. companies to discourage them from moving operations offshore to tax havens. Romney and the Republicans oppose that proposal

Obama’s proposed ‘minimal tax’ would merely slap another $250 billion dollar tax on US companies. Because having the highest corporate tax rate in the world is not enough.

This article was posted by Steve on Wednesday, March 28th, 2012. Comments are currently closed.

One Response to “US Corporate Tax Rate Is Now The Highest”

  1. Petronius says:

    Under tax treaties with foreign countries, the profits of US companies earned overseas are taxed by the countries where those profits are earned. Similarly, foreign companies are taxed by the Federal government on profits made in the USA. This system avoids double taxation as a matter of basic fairness and in furtherance of international trade and prosperity for all.

    It is this fairness principle that is now falling under attack by the regime.

    The regime’s proposed minimum tax on overseas profits would result in double taxation of American companies operating abroad. US companies would no doubt respond by relocating their headquarters abroad –– to Canada, Ireland, Switzerland, Singapore, or other so-called “offshore tax havens” (a term which has now come to embrace the rest of the world). The result would be a further blow to the American economy and standard of living, more unemployment, and a net loss of tax revenue.

    The regime’s proposed elimination of the “subsidy” to oil companies is a misnomer. The “subsidies” they refer to are not subsidies at all, but rather the oil depletion allowance.

    The depletion allowance is a generally accepted accounting principle (GAAP) similar to depreciation. It recognizes the reduced value of a capital asset (land or drilling leases) held for development by a natural resources company due to the removal of the underlying minerals.

    Cost depletion recognizes a charge against earnings for extracting wasting assets (natural resources such as oil, gas, coal, gold, copper, iron ore, bauxite, etc.) as production occurs. This allows investors to recover their initial investment in the asset –– capital that was taxed once when earned –– without being taxed on it again.

    In other words, Nerobama is singling out oil companies for a special tax on investment capital. The net result would be to drive up the cost of petroleum products, with a ripple effect throughout the entire American economy.

    These proposals are yet further examples of predation by Nerobama and the regime upon American companies and the American consumer. This serial predation is not occurring by accident. It is not happening out of ignorance of economics and accounting principles and the way business works.

    It is happening because Nerobama is an anti-capitalist, anti-business, and anti-American Bolshevik predator-thug who is hell-bent on our destruction.

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