By Daniel Brouse
The United States is the only country that taxes domestic corporations on their worldwide income at the federal and state levels. “The IRS reminds you to report your worldwide income on your U.S. tax returns.”
The United States has the highest corporate tax rate in the world. Federal tax rates on corporate taxable income vary from 15% to 39%.
The United States imposes double taxation on corporate dividends. The IRS says, “The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. This creates a double tax.”
The non-competitive corporate tax rate inhibits businesses from starting in the USA, as well, as encourages business to move out of the USA.
An analysis by the Center for Data Analysis (CDA) of a reduction in the corporate income tax rate to 25 percent shows substantial growth for the U.S. economy:
- The number of jobs in the U.S. would grow
- U.S. real gross domestic product would rise
- A typical family of four’s after-tax income would rise on average by $2,484 per year
- U.S. capital stock would grow; and Gross private domestic investment would increase