How Does The United States’ Corporate Tax Rate Compare To Other Countries?

As readers may recall, federal policymakers reduced the U.S. corporate income tax rate to 21 percent several years ago. That decision brought the country’s statutory corporate income tax rate from the fourth highest in the world closer to the middle of the pack.

Despite that progress, and the improved economic competitiveness that comes from it, ever since then there have been discussions about raising the corporate rate back to its previous level of 35 percent. As voters go to the polls in November 2024, Americans may start to hear even more debate about what the appropriate rate is for corporations to pay.

To add important context to these potential debates, the Tax Foundation examined what is happening with corporate income tax rates in 225 jurisdictions around the world.

The nonpartisan, nonprofit found:

• The worldwide average statutory corporate income tax rate, measured across 181 jurisdictions, is 23.45 percent. When weighted by GDP, the average statutory rate is 25.67 percent.
• Corporate tax rates around the world have declined from an average of 40 percent to 23 percent over the past four decades as countries have recognized the impact that high corporate rates have on business investment decisions.
• Corporate tax rate declines have been seen in every major region of the world, including in the largest economies.
• This trend has leveled off in recent years, but, still, most countries have corporate tax rates below 30 percent.
• Of 225 jurisdictions around the world, only six have increased their top corporate income tax rate in 2023, a trend that could be reversed in the coming years as more countries agree to implement the global minimum tax.

Click here to read the Tax Foundation’s full report.