A link to an article highlighting the complexities of the question of whether the U.S. has the highest corporate tax rate "in the world". Also links to other current stats regarding international tax rates. What is a country's corporate tax rate? Depends on what taxes you include in the corporate tax rate. In the U.S. discussion we generally are referring to the top federal coporate income tax rate. But is using that rate to compare really an apples to apples comparison? Maybe...maybe not.
http://businessfinancemag.com/article/does-us-really-have-highest-corporate-tax-rate-0109
Friday, January 11, 2013
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Good article and I admit that a meaningful analysis of corporate tax rates on an international basis is far beyond my abilities.
ReplyDeleteStill if businesses are leaving a specific operating/political environment. res ipsa loquitur (the thing speaks for itself).
I agree wholeheartedly (and thanks for saving me the effort of looking up what I assume is a well know latin phrase). And yet one of the truisms in my business has always been "don't let the tax tail wag the financial dog". The extreme example would be if someone quit working and making an income because they were trying to get their tax liability down to zero. Another better example, yet still extreme for illustrative purposes, would be if a company moved to a country that had no taxes, but because of little to no revenue the country's lack of adequate infrastructure would hinder the company's ability to otherwise maximize their profits. I guess what I am trying to say is that, while the evidence is undeniably striking when companies are moving from a country with one tax structure to a country with a different tax structure for that reason alone, The possiblity cannot be ruled out that these companies are making a poor decision by letting the tax tail wag the financial dog. It happens. It is not out of the realm of possibility that the mother of the soldier watching her son marching with his fellow soldiers was right when she said "look, everyone is out of step but my son."
DeleteInteresting thoughts on income evasion to create a better financial position. I have seen self employed individuals decline work because it would put them in a higher tax “bracket” for the year. Obviously those individuals misunderstand "tax brackets" and marginal tax rates.
DeleteI have also seen welfare recipients decline work opportunities because the income would decrease their benefits checks. (Possibly) A valid financial argument, but certainly a more difficult moral argument.
And I have seen individuals that began drawing SS at 62 avoid income because it would lower their SS checks, not understanding that the earnings would be added to their SS account and that their benefits would be recalculated (to their benefit) at 66.
I suppose all of this reinforces the old saying that numbers are only useful if you understand what they mean.