The Forbes web site reports U.S. corporations have among the highest tax rates in the western world, yet they are still some of the most profitable companies on earth.
Forbes reports: ‘The actual tax rate for corporations is 35%, higher than China and Brazil’s base corporate income tax of 25% and higher than Russian corporations, which pay 20%’. House Republicans call for a maximum tax burden of 25% for all companies.
But many U.S. companies pay less than 35%, thanks to tax credits, deductions, and talented accountants and attorneys in corporate headquarters. In other words, there are ways to drive that rate down from 35%, which is the second highest in the world … behind Japan.
So, do we go for a 25% rate … with no deductions?
Forbes also quotes a study that concludes “that effective tax rates of the big multinationals have actually been falling over the past 20 years”; and “Companies are not in exodus to tax havens”.
Our thought for today is from Bernard Berenson:
“Governments last as long as the under-taxed can defend themselves against the over-taxed.”