First off, let me say that I think it's silly for corporations to pay taxes at all. Why not just tax income when the shareholders of a corporation take out their profit as dividends? Taxing corporate profit and then taxing dividends again for individuals isn't fair, because you're taxing the same money twice on the same people. Anyway, it would be a lot simpler to just combine all the taxes together.
That said, the Tax Foundation has released a new report showing that corporate tax rates in America are among the highest in the world, and there's no doubt that our high rates are pushing jobs and businesses out of the country.
A new study from the Tax Foundation, a nonpartisan tax research group in Washington, shows that most American states tax job providers at a higher rate than any other country in the developed world.
"This is startling news for America's businesses and workers," said Tax Foundation president Scott Hodge, the study's author. "Tax competition for jobs and investment is fierce, and the U.S. continues to fall further and further behind. Our states should be the world's leaders in many things, but high taxation should not be one of them. The high federal corporate tax rate is literally crushing states' competitive abilities. That means fewer jobs for American workers."
Counting the federal rate alone, the U.S. has the world's highest corporate tax rate, but including average sub-national rates (federal plus state in the U.S.), Japan edges out the U.S. for the highest-tax location (see table).
This new study breaks the tax down state-by-state, adding each state's corporate tax rate to the federal corporate tax rate. The results show that 24 states impose, when combined with the federal rate, a higher business tax rate than in any other nation. In fact:
* 24 states have a combined corporate tax rate higher than top-ranked Japan.
* 32 states have a combined corporate tax rate higher than third-ranked Germany.
* 46 states have a combined corporate tax rate higher than fourth-ranked Canada.
* All 50 states have a combined corporate tax rate higher than fifth-ranked France.
As I said though, to be properly considered you need to combine corporate tax rates with individual tax rates. My intuition tells me that if you add corporate tax rates to our individual tax rates, the sum would be lower than the similar sum for the various other countries mentioned. (I have no numbers on hand to back this up.)