Taxing Corporations Away

Galt's Gulch EmblemThere’s more than a little rancor over the fact that many large corporations don’t pay what is seen as their “fair share” in taxes to the government.

This fallacy is being promulgated by America’s domestic enemies, the Liberals, their minority tenants, and their pet “lamestream” media.

This tactic of fostering class warfare works well upon the weak-minded eaters.

Of course these looters won’t tell the eaters or anyone else that America taxes its corporations at a punitively high rate in an effort to fund the various Liberal-sponsored, demanded, and installed entitlement programs that have gone a long way towards beggaring our nation.

2010 Combined Federal-State Corporate Tax Rates in OECD Nations

Nation 2010 Tax Rate Rank
Japan 39.54% 1
United States 39.21% 2
France 34.43% 3
Belgium 33.99% 4
Germany 30.18% 5
Australia 30.00% 6
Mexico 30.00% 7
New Zealand 30.00% 8
Spain 30.00% 9
Canada 29.52% 10
Luxembourg 28.59% 11
Norway 28.00% 12
United Kingdom 28.00% 13
Italy 27.50% 14
Portugal 26.50% 15
Sweden 26.30% 16
Finland 26.00% 17
Netherlands 25.50% 18
Austria 25.00% 19
Denmark 25.00% 20
Korea 24.20% 21
Greece 24.00% 22
Switzerland 21.17% 23
Turkey 20.00% 24
Czech Republic 19.00% 25
Hungary 19.00% 26
Poland 19.00% 27
Slovak Republic 19.00% 28
Iceland 15.00% 29
Ireland 12.50% 30
OECD Average 26.20%

The United States’ top combined federal and state tax burden on corporations was the 2nd highest in the world in 2010 and 33.7% above the average (26.20%) for developed nations according to the Organization for Economic Cooperation and Development (OECD).

Money is much like water; it will flow best with less restrictions. As things stand now it is flowing from America to foreign nations’ coffers largely, though not entirely, because corporations will not willingly invest in profit garnering enterprises in America under the current tax burden.

In this global economy what happens is that the larger corporations, mostly being trans-national, move their profit centers to other, less repressive nations and leave their cost centers such as research and development in America. This means that the bulk of the jobs, especially the middle-class jobs, end up in other countries.

If people want employment in America to improve then we need to encourage corporations to develop operations in America instead of taxing corporations away to foreign lands.  If people want to destroy America’s economy then we can just continue on with the looters’ and eaters’ “Eat The Rich” pogrom.

Related Reading:

Employment Law: Private Ordering and Its Limitations (Aspen Casebook)
The Once and Future Liberal: After Identity Politics
The Joy of Not Working: A Book for the Retired, Unemployed and Overworked- 21st Century Edition
What You Should Know About Politics . . . But Don't: A Nonpartisan Guide to the Issues That Matter
Corporations and Other Business Organizations, Statutes, Rules, Materials and Forms (Selected Statutes)

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6 Responses to “Taxing Corporations Away”

  1. Paradigm Says:

    I don’t know. Seems the countries at the top of the list are doing fairly well and those at the bottom not so much. Germany is the only economically strong country in the EU right now.

    Besides, it’s not just about taxes. Small business here often say they find the paperwork more costly than the taxes. All the work hours put into filling out forms and stuff adds up.

  2. jonolan Says:

    Actually, Paradigm, all of the top 10 countries are in economic decline and those at the bottom tend (Ireland exempted; they screwed up royally) to be growing their economies, though they did start from a much weaker base.

    You’re right though that there’s a lot more to it than just the tax burden, but that tax burden can easily be the straw that breaks the camels back.

  3. Alan Scott Says:

    We have a high corporate tax rate, yet we have loopholes to compensate for it . All kinds of loopholes to engineer the economy . Central planning at it’s best . That’s how you get GE, Obama’s 2nd best liked corporate friend not owing any taxes . Number 1 is GM .

    Why does our fearless leader get in bed with corporations with the first name General?

  4. jonolan Says:

    Sadly, Alan, most of those loopholes involve these companies moving things to other countries or holding bad assets on their books longer than they really should.

    There’s also something called deferred tax assets, which are similar to capital losses whereby a corporation can reduce the amount of tax that a company will have to pay in a later tax period by carrying over a loss from a previous tax year.

    Given the recent crash, it’s not that surprising that a number of companies paid little or no federal income tax since the combination of have sheltered profit centers in foreign countries and carrying domestic losses over from ’08-’09 would be a prevalent practice.

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