Remember all of that “inversion”
buzz about nasty, greedy corporations relocating overseas to escape
their patriotic duty to be milked by the United States government?
“Even as corporate profits are higher than ever,” President Obama
told us, “there’s a small but growing group of big corporations
that are fleeing the country to get out of paying taxes.”
But…Could it be that those companies—and individuals—are
fleeing because the United States tax system so truly sucks that it
isn’t even slightly competitive with the deals offered by other
countries? Let’s see what the Tax Foundation has to say on its new
International Tax Competitiveness Index:
The United States places 32nd out of the 34 OECD countries on
the [International Tax Competitiveness Index]. There are three main
drivers behind the U.S.’s low score. First, it has the highest
corporate income tax rate in the OECD at 39.1 percent. Second, it
is one of the only countries in the OECD that does not have a
territorial tax system, which would exempt foreign profits earned
by domestic corporations from domestic taxation. Finally, the
United States loses points for having a relatively high,
progressive individual income tax (combined top rate of 46.3
percent) that taxes both dividends and capital gains, albeit at a
reduced rate.
That puts us behind Italy, but ahead of Portugal and France.
Yay.
The Index squares remarkably well with the
shitty rating the United States gets from PricewaterhouseCoopers
in its international rankings of ease of paying business taxes.
Maybe, just maybe, people have growing reason to think the land
of opportunity has an overseas address.
No wonder American voters are
down in the dumps over the country’s economic prospects.
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