By John Tamny of RealClearMoney
While there’s seemingly a bipartisan view that the U.S. corporate tax rate should be lowered, the mythology about this same levy is impressive even by Washington standards. The more it’s debated and discussed, the more in the way of untruths about it reveal themselves.
First up is the notion that the U.S. corporate rate of 35 percent is the second highest among OECD nations; Japan being first. While that’s true in a sense, it has to be remembered that the effective tax rate on U.S. businesses is lower than the headline rate. It would be folly to presume most corporations pay 35 percent of their profits to the federal government given the myriad deductions offered by the favor factory that is Congress. Simplified, whenever readers see an abnormally high rate of taxation on anything, they should look behind that number to find the various tax breaks that lower the same rate
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