Essay On Tax In America

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There is a lot of buzz around the states about corporate tax rates. However, there are few Americans talking about the Federal corporate income tax rate. America has is one of the highest corporate income tax rates in the world. By lowering the federal level, the U.S. can help reduce states overall tax burdens, thereby reducing how much money multinational corporations move offshore to avoid high taxes. The overall result would be the business-friendly solution to keeping the money and companies in the U.S.
America's Rising Federal Corporate Income Tax Problems
America’s federal corporate income tax rate has undergone many changes since its inception in 1909 at a flat rate of one percent for all corporations. Not even a decade later, in 1916, …show more content…
The rate gradually increased until 1968, where the top tax rate for corporate income tax peaked a final time at 52.8 percent. Corporations have been paying the current rate of 35 percent since 1993.
These rates are on top of state corporate tax rates, which all but six U.S. states levy a tax on the income of corporations operating in their states.
U.S. Tax Laws Send Corporations Out of the Country
It’s not just overseas, high corporate tax rates send corporations north and south of this country to its neighbors in Canada and Mexico. The U.S. is third only to Chad and the United Arab Emirates in corporate taxes. Out of 173 countries and tax jurisdiction, the average top corporate income tax rate is 22.9 percent. America’s top rate has been 35 percent for the past 22 years.
Canada, America’s northern neighbor has a top tax rate of just 15 percent and Mexico’s top rate is 30 percent, which is still lower than the America’s 35 percent plus any additional state and local taxes.
Of course, corporations look further than North America when determining where they can get more bang for their buck, which is why many multinational corporations set up shop in China, where the total corporate tax burden is between 15 and 25 percent (kpmg.com source) and other countries with a lower corporate tax
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