Why We Need Federal Tax Reform: U.S. Has Fourth-Highest Corporate Tax Rate
Federal lawmakers currently are debating a comprehensive tax reform package that would reduce income tax rates for individuals, families, pass-through entities and other small businesses, and corporations.
One reason reform is necessary is because the United States has one of the highest corporate tax rates in the world. According to a report released last week by the non-partisan Tax Foundation:
- At 38.91, the United States has the fourth highest statutory corporate income tax rate in the world. Only the United Arab Emirates, Comoros, and Puerto Rico have higher rates.
- The worldwide average statutory corporate income tax rate is 22.96 percent. When weighted by size of a nation’s economy, the average statutory rate is 29.41 percent.
- Europe has the lowest regional average rate, at 18.35 percent.
- In general, large industrialized nations tend to have higher statutory corporate income tax rates than developing countries.
- The worldwide average statutory corporate tax rate has consistently decreased since 1980, with the largest decline occurring in the early 2000s.