4. Belgium
> 2012 tax rate: 34%
> 2002 tax rate: 40.17% (2nd highest)
> GDP: $0.41 trillion (15th highest)
> Gov’t debt as pct. of GDP: 100.7% (7th highest)
Over the past decade, Belgium has cut its corporate tax rate by more than six percentage points, dropping its rank among developed nations from second to fourth. It remains particularly high, however. According to the American Chamber of Commerce in Belgium, the country’s high corporate tax rate is “a major reason for the 75% decrease in foreign direct investment in Belgium since 2007.”
3. France
> 2012 tax rate: 34.4%
> 2002 tax rate: 35.43% (8th highest)
> GDP: $2.19 trillion (5th highest)
> Gov’t debt as pct. of GDP: 94.1% (8th highest)
Although France has decreased its corporate tax rate over the last decade, its rank relative to other developed countries has increased substantially. From 2002 to 2012, France’s rank moved from the eight-highest corporate tax rate to the third-highest. The French government announced in February of this year that it would be “harmonizing” its corporate tax rate with Germany by 2013. This is viewed as a step towards a EU-wide enforced tax rate.
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2. Japan
> 2012 tax rate: 38.01%
> 2002 tax rate: 40.87% (the highest)
> GDP: $4.30 trillion (2nd highest)
> Gov’t debt as pct. of GDP: 199.7% (the highest)
Japan had the highest corporate tax rate among industrialized nations until April 1 of this year, at which point it cut its tax rate from 39.5% to 38.01%. This new rate includes a 10% surtax that will expire after 2014. Before this cut, Japan held its position as the country with the highest corporate tax rate since 2001. According to Ernst & Young’s T Magazine, Japan’s government has wanted to increase tax competitiveness for many years. The magazine notes that 69 of Japan’s leading chief executive officers said that a reduction in the corporate income tax rate was their second-highest priority.
1. United States
> 2012 tax rate: 39.2%
> 2002 tax rate: 39.3% (3rd highest)
> GDP: $14.58 trillion (the highest)
> Gov’t debt as pct. of GDP: 93.6% (9th highest)
While the weighted average corporate tax rate of OECD countries has decreased by more than six percentage points over the past decade, the United States’ corporate tax rate has merely dropped from 39.3% to 39.2%. This relative lack of movement has propelled the U.S. to the top of list of corporate tax rate among industrialized nations. The U.S. is also the only OECD country to currently tax companies’ profits earned abroad. The country continues to have the world’s largest GDP.
Charles B. Stockdale
