President Barack Obama’s proposal to lower the tax rate on U.S. corporations to 28% from 35% and to close dozens of tax loopholes does not go far enough to make much of an economic difference.
If enacted, the U.S. would go from having the highest corporate tax rate to the fourth highest, after Japan, France and Belgium, according to a blog post by Scott Hodge, president of the Tax Foundation. When the average tax rate of 6.4% is factored in, the proposed cut is even less impressive, since it would result in rates of 32.6%, still above the 25% average of the members of the Organization of Economic Cooperation and Development. Hodge writes:
“Let’s not forget that none of these changes are happening in a vacuum. On January 1st of this year, the Canadian corporate rate fell to 15 percent from 16.5 percent and the British corporate rate fell to 25 percent from 26 percent. And, as is well known, Japan will cut their overall rate to 38.01 percent from over 40 percent on April 1st.” Read