Quote:
Originally Posted by Rockin' Flames
You do realize I'm talking about corporate tax right? Not corporate and individual taxes...
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.
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Yes, I understand your comment regarding the corporate tax very well.
What I'm saying is that the statutory rate is basically irrelevant because very few corporations pay the statutory rate. The effective rate is what matters. If you believe the effective rate is too high, then that is another matter.
Here is another set of data from the
cbo showing that the effective corporate tax rate is low 20s and is at or below the median level of the G7 over a 20 year span up to 2002. Rates have only gone down since.
If you're going to start a business, then you would be interested in what net taxes you would pay when all is said and done. Not the statutory rate.
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I still think the comparison of tax revenues to GDP is the best comparator across nations (see table on page 13 of above link). In this comparison it's quite clear that corporations in the US are far from overtaxed.