On corporate tax rates, a telling chart
The U.S. system of corporate taxation is becoming less and less globally competitive, Business Roundtable President John Engler testified Tuesday at the Senate Finance Subcommittee on Fiscal Responsibility and Economic Growth's hearing, "Examining Whether There is a Role for Tax Reform in Comprehensive Deficit Reduction and U.S. Fiscal Policy." High statutory corporate tax rates are a major factor in that deteriorating competitive position, he said.
The U.S. rate is out of step with our trading partners to the detriment of investment in the United States. The loss in investment and economic activity reduces economic growth and job creation.
According to the OECD, the U.S. statutory corporate tax rate (including deductible subnational taxes) was 39.2% in 2011, more than 50 percent higher than the 25.0 percent average tax rate for the rest of the OECD. The U.S. rate is the second highest among the 34 countries in the OECD, only fractionally below Japan's.
Since 1988, the average OECD corporate income tax rate (excluding the United States) has dropped 19 percentage points while the U.S. federal rate increased by one percentage point over the same period.
The chart tells the story.
(Click to enlarge)
Engler included the chart in his oral testimony to the committee, which you watch at the Senate Finance Committee's website, starting at the 71:30 mark here.
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