I frequently hear my friends on the left complaining that corporations are not taxed fairly, which means, not highly enough. The reasoning is that business can afford higher taxes, while individuals struggle.
Let's put that second thought on the shelf for a moment, and look at whether or not corporate taxes in the USA are high or low.
According to The Tax Foundation, the US corporate tax rate is 35%. That's highest in the world, with France right behind at 34.43% and Belgium at 33.99%. Ireland is lowest, at 12.5%.
But those are just federal taxes. Let's not forget that our states add their own corporate taxes. After the state corporate taxes are added, corporations in 24 states by higher taxes than anywhere else in the world. Indiana is among these 24. Only 3 states add zero corporate tax: Nevada, South Dakota, and Wyoming. Wonder no longer why so many corporations are registered in those states. Here's a link to the rankings.
My wife has been urging me to incorporate my business. I have been hesitant. Can you blame me?
Can business afford the taxes? No, but then, they really don't pay them. Individuals do, in the marked-up price that covers these (and so many other) taxes.
Even still, can they afford it? It means that products made in Ireland can be shipped here and still be vastly cheaper than products made here. Ever wonder why we have a trade imbalance? Hmm. Maybe this has something to do with it. Coincidentally, Ireland has been one of the world's economic growth leaders. Hmm. Maybe, just maybe, this has something to do with it.
What is more important? Our ability to compete in the global marketplace? Or, to fund more government? From the Tax Foundation:
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.
"If federal lawmakers are serious about making the U.S. corporate tax system more competitive globally, they will have to partner with state officials to lower the nation's overall corporate tax burden," Hodge added. "Likewise, state officials should have a vested interest in cutting the federal corporate tax rate because there is only so much they can do to improve their own competitiveness. After all, even corporations in the three states that do not impose a major state-level corporate tax—Nevada, South Dakota, and Wyoming—still shoulder a higher corporate tax rate than France, and 25 other major countries, because of the 35 percent federal corporate rate."
I'd say the corporate tax rate is ridiculously too high. The left may enjoy targeting big, bad corporations as some kind of evil, but funnelling tax money to government is something they actually do with aplomb- to the detriment of us all.