High U.S. Tax Rates, but Most Businesses Pay No Tax – How Can That Be?
A couple of recent stories about taxes on U.S. businesses have me shaking my head.
On the one hand, the U.S. has the second highest corporate tax rate in the world (at 39.3 %, average of federal and state), with only Japan being higher. And some states, including Iowa, California, Pennsylvania, and New Jersey, pay higher taxes than Japanese businesses. A Wall Street Journal story detailing these figures includes statements about how damaging these tax rates are to U.S. businesses. At the least, these high taxes are dis-incentivizing. Why bother?
On the other hand, many U.S. businesses pay no tax at all. …read more