Japan fell from the top position by lowering its top corporate rate from 39.5 percent to 36.8 percent.
Ever-increasing tax rates are causing U.S. companies to move their production elsewhere, taking away American jobs.
Anheuser-Busch, for example, is an iconic, American-owned company. That was until Brazilian-Belgian company InBev initiated a takeover of the brewer, leading to more than 18,000 layoffs. More such takeovers are looming in the near future.
Heritage Foundation tax expert Curtis Dubay explains why these high rates punish American firms:
This gaping disparity means every other country that we compete with for new investment is better situated to land that new investment and the jobs that come with it, because the after-tax return from that investment promises to be higher in those lower-taxed nations.
Our high rate also makes our businesses prime targets for takeovers by businesses headquartered in foreign countries, because their worldwide profits are no longer subject to the highest-in-the-world U.S. corporate tax rate. Until Congress cuts the rate, more and more iconic U.S. businesses such as Anheuser-Busch will be bought by their foreign competitors.
Heritage’s Mike Brownfield further explains that the Obama administration is proposing measures like a “global minimum tax” that will actually make matters worse for U.S. companies:
Just like the rest of President Obama’s corporate tax policy, it will just make matters worse — punishing firms that seek new opportunities in growing markets by taxing their earnings in those developing markets even more heavily than they’re already taxed. The net result will be to make it even more likely that the companies’ assets would go up for sale to overseas firms in order to escape the Obama tax penalty. Unfortunately, America’s workers pay the price for this destructive tax policy.
Congress must act now to help make America more competitive. This can be done by reducing the corporate tax rate to match or better yet beat the international average.
“The U.S. economy is struggling to recover from the global recession, and by lifting the burden of record-high corporate tax rates, Congress can give American companies incentive to grow and expand here at home,” Brownfield concludes. “If not, the American people can expect to see more companies like Anheuser-Busch bought up by international competitors — and the jobs will go right along with them.”
What do you think about America having the highest taxes in the world? What do you think needs to be done to overturn this?