US Companies Paying Full Share of Taxes
September 14, 2011 Taxation in USA
US companies currently face on of the highest tax rates in the world, with their effective charges eclipsing those faced by companies in almost all OECD countries.
In a new report examining corporate tax rate in the US, the Tax Foundation has blasted back at claims that US corporations are not paying enough taxes, saying that the country has one of the highest statutory corporate income tax rates in the developed world. The analysis, which was published in September 13th, also showed that the country’s effective tax rate is also far above the average rate seen in OECD nations.
According to the authors of the report, the statutory income tax rate in the US is currently at 39.2 percent. The study also took into account potential tax breaks available in the US, which could lower a company’s tax liabilities. Data contained in the report indicates that the US’s average effective corporate tax rate could be as low as 29.8 percent. However, it was shown that even the lowered rate is still 7.4 percent above the average effective tax rate paid by companies in OECD countries.
The authors of the report acknowledged that the issue of corporate tax payments in the US is currently highly debated topic in social and political circles, however there is still a lot of misinformation and over exaggeration in the media regarding this controversial issue. The report is intended to highlight the realistic tax burdens faced by national corporations.
Since 1997 30 out of the 34 OECD member nations have lowered their corporate income tax rates, bring the average rate from 36.5 percent to 25.1 percent. The authors suggested that the only country with a higher effective tax rate than the US is Japan.
Photo by Shayne Kaye