In a short post over at CATO@Liberty, Daniel Mitchell comments on a new KPMG global survey of corporate taxes, pointing out the obvious fact that it punishes American companies for keeping jobs in America.
KPMG has released its annual global survey of corporate tax systems. For the 10th consecutive year, the average corporate tax rate fell, and it is now down to 25.5 percent — and just 23.2 percent in the European Union!
In the United States, unfortunately, the corporate tax rates remains stuck at about 40 percent. Only one developed nation, Japan, has a more punitive regime.
That’s something to keep in mind the next time a politician complains that jobs are going to China, where the corporate tax rate is 25 percent.
Take a look at the KPMG survey data here. It is interesting to contrast what some other countries are doing compared to the US. From the KPMG survey:
Note the far more sensible response to the economic downturn from countries like the UK, Russia, and Germany.
Corporate taxes are simply indirect taxes on individuals, essentially hiding the staggering scale of the cost of government by building it into the cost of goods and services. When you hear politicians in the US talk of a possible Value Added Tax they are looking for more of the same, dishonestly hiding the costs of government in the prices that consumers pay for the items that they buy every day.
Clearly the best thing that could happen for American taxpayers would be the abolition of corporate taxes and the income tax, replacing them with something like the FairTax.