Beginning this Sunday, the United States will gain bragging rights in the economic war with Japan and China: It will have the largest jobs-killing corporate tax rate in all of the industrialized world.
This is no April Fool’s joke. Once Japan officially drops its tax rate to 36.8% this Sunday, the USA’s will be at the top of the chart at 39.2%.
While the President has suggested a new 28% rate, Republicans claim that the reduction also would bring $350 billion in new taxes to offset losses. In response, the GOP is suggesting a reduction to 25%; however, the upcoming election seems to be preventing any compromise.
Any business groups are asking that the government make a cut in the rate for corporate taxes, believing the reduction would improve the growth of jobs and encourage reinvestment in industry. These groups cite moves in the UK to loser taxes by 6% from the former rate of 28% in a move to increase jobs and investment in Britain.
Tia Freeman of the Roundtable groups claims comprehensive tax reform to be imperative for the United States if the country is to remain an economic leader in the world.
Chair of the Senate Republican Policy committee, John Barrasso, R-Wyo. is also pressing for tax rate action. Barrasso claims that Russia and China with 20% and 25% tax rates respectively have lower rates than the US. This higher tax rate puts American companies at a disadvantage in the world market.
- Effective Tax Rate: Not As Simple As It Seems (2010tax.org)
- Interesting Facts On 2012 Taxes (2012taxes.org)