Fed corporate tax killing state competitiveness
One could sum up a report from the Tax Foundation as saying the equivalent of – the French are eating our lunch. And you know that is not good. We, for many reasons, including avoidance of indigestion, should be eating theirs. The latest report from the Foundation shows that
nearly half of U.S. states tax job providers at a higher rate than any other country in the developed world. Counting the federal rate alone, the U.S. has the world’s highest corporate tax rate, but including average sub-national rates (federal plus state in the U.S.), Japan edges out the U.S. for the highest-tax location.
This study breaks the tax down by state, adding each state’s corporate tax rate to the federal corporate tax rate. The results show that 24 states impose, when combined with the federal rate, a higher corporate tax rate than in any other nation. In fact:
· 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.
The study of the author, Scott Hodge, sums it up:
The high federal corporate tax rate is literally crushing states’ competitive abilities. That means fewer jobs for American workers. 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.
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.