U.S. Corporate Tax To Be Highest In World

A Rate Which Lives In Infamy
Investors Business Daily Editorial

Fiscal Policy: President Calvin Coolidge famously said that the chief business of the American people is business. Now it seems that the chief business of Congress is to make sure American businesses are taxed at a punitive rate.

Earlier this week, Japan quietly announced it was cutting its corporate tax rate by 5 percentage points next year. That will leave the U.S., where the average combined federal and state corporate rate is 40%, with the highest rate in the developed world (see chart).

A high corporate tax rate is a drag on an economy. It affects a country's competitiveness as the steep rates chase away investment. Why pour capital into a factory or tech business in the U.S. when you could build either one in South Korea, where the corporate tax rate is nearly 40% lower and the work force is just as educated, skilled and motivated, if not more so?

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