The Editor of the Wall Street Journal commented today on a report from the Organization for Economic Cooperation and Development which revealed that we are leading the world, not in the Olympics or any measure of trade.
No. We have the honor of the HIGHEST corporate tax rate of any developed nation in the world. (Well, Japan beat us by a nose.) But our combined federal/state tax rate for corporations is an average of 39.3%.
The rest of the civilized world is frantically cutting the corporate tax rates to grab more of the market.
But not us. Senator Obama is poised to go after all those big corporations in the US who don’t pay any taxes at all. And who are they?
Among them are American Airlines, which lost $862 million in 2005 and General Motors, which lost over $10 billion. Do you think that might have something to do with them not paying taxes?
The old notion that Europe is deeply rooted in socialism may not be the case anymore. Europe's average corporate tax rate is 10 points lower than ours. Ireland’s is only 12.5%!
The Obama answer is to chase that tax money overseas by taxing American businesses who set up shop in Europe. Most corporations will simply leave altogether rather than pay taxes like that, resulting in the loss of additional jobs here. (Even Drucker’s “knowledge workers” won’t be safe from lay-offs.)
This chart shows rather clearly that the rest of the world figured it out a decade ago but our politicians still want to punish success.
(Wall Street Journal chart - 8/15/08)For globalists we’ve got a lot to learn.
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