The New York Times today addressed the current proposal to lower taxes for corporations. The White House and the Republican controlled Congress are arguing emphatically that corporate tax rates need to be reduced because the U.S. has the highest tax rate among the seven most developed economies in the world.
Yes, they are correct that the U.S. has the highest marginal rate, but U.S. corporations do not pay the most taxes. As seen below, and as reported by the White House and the Treasury Department in 2016, U.S. companies pay the fifth highest as measured by the effective rate. If the same tax breaks and financial loopholes remain AND their maximum tax rate declines from 35% to 20% U.S. corporations will be near the bottom. Why does this matter? Because of the United States government’s current budget debt of $20,496,092,622,812. Yep, it’s a lot…mucho grando. If a plan isn’t put into action to reduce it soon it may lead to economic trouble ahead.