US ready may become world’s highest corporate taxer
The US has the second highest corporate tax rate among advanced economies. But maybe not for long. Tell the people the bad news, Reuters:
Japan’s ruling Democratic Party will seek a reduction in corporate tax to encourage economic growth as part of its platform in upcoming upper house elections, Japanese business daily Nikkei reported on Saturday. Without citing any sources, the daily said the Democrats want to cut corporate tax in order to increase the global competitiveness of Japanese companies. Rates charged to Japanese firms are high compared with other countries, Nikkei reported. Japan’s corporate tax is around 40 percent, about 10 to 15 percentage points higher than taxes in EU nations and countries like neighbouring South Korea, it said.
Scott Hodge of the Tax Foundation finds this peculiar:
On the same day that Japan’s Nikkei business daily is reporting that the Japanese “government is aiming to cut tax on company earnings by five percentage points next fiscal year,” the Wall Street Journal is reporting that “Democrats are trying to boost their political fortunes ahead of this year’s midterm elections by attacking corporate tax rules they say encourage U.S. multinationals to send jobs overseas.”
Me: What the US should be doing is putting a long-range deficit reduction plan into place and then boosting growth through cuts in corporate and capital tax rates.