Is Corporate Tyranny Destroying America? Pt 3

Although the United States has the second highest statutory corporate tax, the background paper reports that U.S. corporate income tax revenue (federal and state) as a percentage of GDP paradoxically is much lower than the OECD average — 2.2 percent in the United States versus an OECD average of 3.4 percent — over the 2000-2005 period. In short, the OECD data present a conundrum — the United States has the second highest combined statutory corporate tax rate among OECD countries, yet is tied with Hungary in raising the fourth lowest amount of combined corporate income tax revenue relative to GDP in 2004

Clipped from www.taxanalysts.com

The Corporate Tax Conundrum by Peter R. Merrill In conjunction with a conference on business taxation and global competitiveness, the Treasury Department on July 26, 2007, released a background paper on the taxation of business income in the United States. The background paper describes the taxation of corporate and noncorporate businesses in the United States, compares the U.S. corporate tax system with that of its major trading partners, and describes the major economic distortions caused by the U.S. rules for taxing income from capital. The background paper reports that the United States has the second highest combined (federal and state) statutory corporate income tax rate among the 30 member countries of the OECD. At 39 percent, the U.S. combined statutory corporate tax rate is reported to be 8 percentage points higher than the OECD average. More recent data collected by the OECD show that the OECD average corporate tax rate has fallen to 28.4 percent in 2006, almost 11 percentage points below the U.S. tax rate. This gap continues to widen. Legislation has been enacted further reducing corporate tax rates in Germany (from 38.9 percent to 29.8 percent), the United Kingdom (from 30 percent to 28 percent), and Denmark (from 28 percent to 25 percent). Read more at www.taxanalysts.com