Japan does, however, still have the highest corporate tax rate in the industrialized world.
hey, how has their economy been the last couple of decades, anywho? just roaring along, right?
no? gosh...... well, have they tried massive stimulus spending to improve that?
they have? gee.....
it's almost enough to make you wonder if a high-tax-high-spending government puts downward pressure on private sector growth or something....
yes and no - it depends on the company and the industry. our retailers, for example, pay pretty close to the nominal tax rate, while companies that are friendlier with the Administration and able to take greater advantage (like GE) pay less.and US companies pay less taxes than other industrialized countries because of all the deductions, tax shelters, and loopholes
actually it will - because they pay alot to get to those lower tax rates. If I am Acme Inc., and I can hire 150 of the highest-voltage tax attorneys in the world at a cost of 3,000,000 so that they can tell me how to divert 15,000,000 into particular shelters and less productive venues in order to avoid 50,000,000 in taxes; then I save a cool $32 million. But it still cost me $18 Million to save that $50 million.I have been reading about this for the past 20 minutes, and I might start a post on it in a few minutes. The fact is, US corporations actually pay less taxes than most other countries but the tax rate is high. Lowering the tax rate isn't going to do anything, because more than 50 percent of corporations pay NO taxes at all.
when you lower the nominal rate, you reduce the incentives to spend that $18 million, and in particular lose the gains that the $15 million portion would have gotten you in increased production. Not only do you see production increases from the fact that people are now seeking to put less of their money into tax avoidance (and thus pumping that money into production), you see increases from the fact that they now need to spend less of the $3 million to figure out how to do so. You are reducing the compliance costs of the system, and reducing the incentive to engage in tax avoidance. the result is more actual revenue and more growth.