The Tax Foundation releases its International Tax Competitiveness Index this week and the U.S. ranks 32 out of 34. From the WSJ:
The index measures various factors that determine how friendly a government is to business and investment, including the amount of taxation and the complexity of tax rules. While Washington gets credit for refraining from a value-added tax on top of its other levies, the U.S. comes in dead last among the 34 developed countries in the Organization for Economic Cooperation and Development (OECD) when it comes to taxing corporate income.
The U.S. has the highest top marginal corporate income tax rate at 39%, reports the Tax Foundation, and it has a complex method of collecting it. The U.S. rate—the 35% federal rate plus the average state rate—is a full 14 points above the OECD average of 25%. It’s worse if your CEO and board are crazy enough to be based in Pennsylvania with its 9.99% rate. The U.S. could also attract investment and spur growth by reducing regulation and tort-law plundering, but the U.S. isn’t pursuing those options either.
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