The United States corporate income tax rate is the highest in the developed world. The federal rate, combined with the average rate the states add on, is over 39 percent. That is considerably higher than the 25 percent average rate of our international competitors in the Organization for Economic Cooperation and Development (OECD). Our high rate is driving new investment, and the jobs that come with it, to those other OECD countries with more competitive rates. The U.S. also remains one of the few countries that taxes its businesses on the income they earn in other countries. In combination with the high rate, this causes U.S. businesses to be more valuable if they are headquartered in other countries. That way their earnings in other countries would not be subject to the high U.S. tax rate. This makes them prime targets for takeovers by foreign competitors that can increase the value of U.S. businesses simply by purchasing those U.S. businesses and moving their headquarters to their own lower-taxed country. Until Congress lowers the rate to match or beat our competition and fixes worldwide taxation on multinational firms, it will be a struggle to create jobs in the U.S.
Taxes should raise the revenue to fund necessary government operations in ways that cause the least possible economic damage. Accordingly, Congress and President Obama should reform the existing tax code and drop their current plans to increase taxes on high-income earners, small businesses, investors, and other job creators. Read More.
Brian Darling discusses the GOP race and the 2012 presidential campaign on CBC's Power and Politics. …
Last week, President Obama said he would soon propose a set of policies that would eliminate tax breaks for businesses that move jobs overseas and reward businesses that bring jobs to the U.S. as part of his new “insourcing” agenda. If the President proposes more of…
From The Heritage Foundation, I'm Ernest Istook. …
Abstract: The current tax system discourages saving. It discourages investment. It discourages entrepreneurship. It causes decision makers to misallocate the nation’s resources, limiting productivity gains, wage gains, and the nation’s overall level of international competitiveness. And, it is far, far too complicated. The New Flat Tax is the remedy.…
Targeted tax credits have become a popular and prevalent method for the government to award preferential treatment to certain energy industries. Over the past decade, the number of tax preferences for the production and consumption of government-picked energy technologies has expanded considerably.[1] This favored tax treatment acts as…
Abstract: U.S. companies that own foreign subsidiaries pay taxes abroad—and they often pay taxes again when the companies bring the earnings home—known as repatriation. This double taxation naturally hurts competitiveness at home and abroad, and encourages U.S. companies to leave these earnings abroad. A…
Saving the American Dream is The Heritage Foundation’s plan to fix the debt, cut spending and, above all, restore prosperity. It balances the nation’s budget within a decade—and keeps it balanced. It reduces the debt and cuts government…
The labor market recovery continued in March as the Bureau of Labor Statistics reported that the unemployment rate fell to 8.8 percent and nonfarm payroll employment increased by 216,000. With the unemployment rate falling for four straight months, the unemployment rate for March was the lowest since April of 2009.…
President Barack Obama called on Congress to reform the corporate tax system in his State of the Union address. There is much to fault with the current corporate tax code, but the high tax rate is the biggest threat facing the economy right now. Congress should focus on lowering the…
THE ISSUE: Taxes should raise the revenue to fund necessary government operations in ways that cause the least possible economic damage. Accordingly, Congress and President Obama should reform the existing tax code and drop their current plans to increase taxes…
Abstract: The Obama Administration and its allies in Congress want to eliminate the deductibility of punitive damages as a business expense. Such a move would increase the damages paid by businesses in lawsuits¾a brilliant scheme sure to boost the stagnant economy. In fact, increased…
Taxes serve no necessity other than to finance government activities. Regrettably, policymakers often make the mistake of viewing taxes as only funds available for allocation among competing programs. In doing so, they ignore the dramatic effects of incentives created by taxes and the important influences of…
Abstract: The “Obama tax hike”—the expiration at the end of 2010 of tax relief enacted nearly a decade ago—is a major issue facing American taxpayers. Often overlooked is yet another tax hike fermenting in Washington—the elimination of tax expenditures to shrink budget deficits. This…
Abstract: The Bipartisan Tax Fairness and Simplification Act of 2010 would simplify the convoluted tax code and lower tax brackets for most Americans. Sponsored in the Senate by Democrat Ron Wyden of Oregon and Republican Judd Gregg of New Hampshire, this tax reform proposal would free productive resources to be…
One way to spur private sector investment in the U.S. and get it into the hands of entrepreneurs would be to reduce the federal statutory corporate income tax rate, which is currently 35 percent. The Heritage Foundation’s Center for Data Analysis (CDA) conducted a dynamic simulation of…
In light of the impending Obama Tax Hikes, Mercatus Center senior research fellow Veronique de Rugy created the chart...…
Senior Policy Analyst, Tax Policy
Norman B. Ture Senior Fellow in the Economics of Fiscal Policy