New Study: U.S. Corporate Tax Rate 50% Higher Than Economic Competitors

2008-08-13 07:00:00




    OECD Study Shows 17th Consecutive Year of Corporate Tax Declining in

Non-U.S. Countries While America Stands Still, now Second-Highest



    WASHINGTON, Aug. 13 /EMWPresswire/ -- Tax Foundation President

Scott Hodge this morning released the latest Tax Foundation "Fiscal Fact"

in response to a new study from the Organisation for Economic Co-Operation

and Development (OECD). The OECD study shows that for the 17th consecutive

year, the average rate of corporate taxes in non-U.S. countries fell while

the U.S. corporate tax rate stayed the same.



    The new Tax Foundation study can be found at

http://www.taxfoundation.org/publications/show/23470.html.



    As a result of the U.S. failure to lower its corporate tax rate for

more than two decades while other major trading nations lowered theirs, the

U.S. corporate tax rate is now 50% higher than the OECD average. Nine key

trading partners cut their rates during 2007.



    "Continued failure by U.S. tax policymakers to keep up with our top

global economic competitors means that we're solidifying a trend that will

result in our children and grandchildren not seeing the economic growth

we've seen in our lifetimes," noted Hodge. "There's a real-wallet impact

for Americans as we continue to sit idly by while other countries improve

the way they do business, and we should be very concerned about jobs,

capital, and investments moving from high-tax countries to low-tax

countries."



    This comes on the heels of another recent OECD study showing that

corporate taxes are the single most harmful tax to GDP growth, more so than

personal income taxes or consumption taxes.



    The combined federal and state corporate tax rate in the U.S. currently

stands at 39.3% (the second-highest among industrialized countries), while

the OECD average rate has fallen to 26.6%. Even China has recognized the

significance of cutting the corporate tax to become more competitive,

reducing their top standard corporate tax rate from 33% to 25% just this

year.



    Scott Hodge is president of the Tax Foundation, a nonpartisan,

nonprofit organization that has monitored fiscal policy at the federal,

state and local levels since 1937. He leads the foundation's new CompeteUSA

campaign for business tax reform along with Robert Carroll, Ph.D., Vice

President of Economic Policy at the foundation and recently Deputy

Assistant Secretary for Tax Analysis at the Treasury Department.





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