- Oct 7, 2011
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By Jay Timmons
The United States is number one, but this achievement is nothing to celebrate.
As of April 1, the United States has the highest corporate tax rate among developed economies after the previous holder of the top spot, Japan, reduced its rate.
Reaching a milestone of this magnitude number one in the world often requires hard work, but in this case, it was easy. The United States didnt have to do anything. Our top corporate tax rate has hovered at 35 percent for years. Meanwhile, other countries have gotten the message that lowering corporate taxes encourages growth. Canada has engaged in a series of cuts, ultimately reducing its corporate rate to 15 percent. Great Britain recently announced it will drop its corporate tax to 24 percent next month and then 22 percent by 2014.
As other nations take steps to improve their competitiveness and attract investment, the United States has stood still. As a result, weve placed ourselves at a significant disadvantage in the global economy.
Manufacturers in particular feel the brunt of our policies. It is 20 percent more expensive to manufacture in the United States than it is among our major trading partners excluding the cost of labor according to a recent study by the Manufacturing Institute and MAPI. Corporate taxes are the primary driver of this cost differential.
High corporate tax rates have a number of harmful effects on the economy. For one, they sap resources that businesses in the United States could use to expand and create new jobs. In addition, for manufacturers from around the world looking to expand into new markets, our number ranking is not a strong advertisement.
The good news is that Washington recognizes our corporate tax regime is a problem. Both Democrats and Republicans have expressed support for corporate tax reform and have offered ideas about what they would like to see. If policymakers focus solely on corporate taxes, however, theyll miss the majority of enterprises in the United States.
Read more: We're number one! | The Daily Caller
The United States is number one, but this achievement is nothing to celebrate.
As of April 1, the United States has the highest corporate tax rate among developed economies after the previous holder of the top spot, Japan, reduced its rate.
Reaching a milestone of this magnitude number one in the world often requires hard work, but in this case, it was easy. The United States didnt have to do anything. Our top corporate tax rate has hovered at 35 percent for years. Meanwhile, other countries have gotten the message that lowering corporate taxes encourages growth. Canada has engaged in a series of cuts, ultimately reducing its corporate rate to 15 percent. Great Britain recently announced it will drop its corporate tax to 24 percent next month and then 22 percent by 2014.
As other nations take steps to improve their competitiveness and attract investment, the United States has stood still. As a result, weve placed ourselves at a significant disadvantage in the global economy.
Manufacturers in particular feel the brunt of our policies. It is 20 percent more expensive to manufacture in the United States than it is among our major trading partners excluding the cost of labor according to a recent study by the Manufacturing Institute and MAPI. Corporate taxes are the primary driver of this cost differential.
High corporate tax rates have a number of harmful effects on the economy. For one, they sap resources that businesses in the United States could use to expand and create new jobs. In addition, for manufacturers from around the world looking to expand into new markets, our number ranking is not a strong advertisement.
The good news is that Washington recognizes our corporate tax regime is a problem. Both Democrats and Republicans have expressed support for corporate tax reform and have offered ideas about what they would like to see. If policymakers focus solely on corporate taxes, however, theyll miss the majority of enterprises in the United States.
Read more: We're number one! | The Daily Caller