Quote:
Originally Posted by Flames Fan, Ph.D.
This is a typical canard.
The median effective tax rate is around 25%, with many paying much much less. So the burden is nowhere near the oft-quoted top marginal rate.
Better comparison is tax revenues as percent of GDP. The US is near the bottom of the pack there.
Edit:
Here are the data from the Treasury. If you go to page 24 you'll find that the effective rate across the economy is 17%. I apologize for overshooting it. |
You do realize I'm talking about corporate tax right? Not corporate and individual taxes. On the individual tax level I don't dispute that the rate is lower. When you start looking at the effective rate such as what you mentioned on "page 24" it's accounting for taxes on the individual level which includes utilizing retirement vehicles etc. You will arrive at similar results when comparing tax revenue to GDP because this is accounting for both corporate and personal tax rate.
On the same Treasury report you refer to if you look on page 35 the statutory corporate tax rate is 39% which is the 2nd highest (only 1% below Japans). This is the CORPORATE tax rate. Are there mechanisms to adjust what amount of income is taxed? yes, such as depreciation, paying salaries, etc. However, the statutory rate is 39%.
Now the US has developed some useful corporate structures, (such as flowthru corporations) however, this type of corporation doesn't work in all circumstances.
If I'm a corporation looking at setting up business one factor I'm looking at is the corporate tax rate not the marginal tax rate because the corporate rate is what I would be paying and is going to impact the profits to my shareholders. Not to be cold but I really don't care what tax rate rate individuals are being taxed at.