Corporate Tax,

 

U.S. corporations are at a competitive disadvantage when it comes to Taxes of 39.1 percent.  Other industrialized countries face an average rate of 25 percent.  Belgium and France (34.4 percent), Sweden (22 percent). 

The IRS allows business deductions for ordinary and necessary business expenses. Capital expenses such as investments and real estate also qualify for deductions. 

The company bottom line is faring a lot better these days than the average American’s weekly paycheck. In 2012, corporate profits as a share of the economy hit the highest level since World War Two, but the overall Compensation of workers fell to a 57-year low.

The profit of corporations rose to 12.4% of gross domestic product. That was up slightly from 12.1% in 2011 and marked the highest rate since 1943.

Corporate tax reformers rightly point out the large amounts of U.S. corporate equity income trapped overseas to avoid extra U.S. taxes on top of taxes already paid abroad.

Reform is difficult without broader business income tax review – that is, reducing tax rates on business income more generally while broadening the tax base. The gains from overall tax reforms would be very large and the corporation will do better. Time to do it.

Just a thought