From the Washington Post:
Today, the Treasury estimates, as much as 70 percent of net business income escapes the corporate tax.
What this means is that there are companies of the same size with the same profits, in some cases competitors in the same industry, that are paying significantly lower tax rates — on average, 6 percentage points lower — just because they operate under a different legal charter…
These days, the business lobby never misses an opportunity to point out that the 35 percent corporate tax rate is the highest in the industrialized world. With state taxes, it’s about 39 percent. For other industrialized countries, the statutory rate averages about 30 percent.
What really matters to business, of course, is not the statutory rate but the effective tax rate — the percent of profits paid in taxes once all the deductions, credits and other complex provisions of the tax code are taken into account. What you don’t hear from the business lobby is that, in terms of the effective rate, the United States is slightly below the average of the big industrial countries, at about 26 percent. According to Sullivan, the claim that our corporate tax rate is crippling the competitiveness of American business is “vastly overstated.â€
