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The Water Cooler
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Biggest leak in history of data journalism just went live, about corruption. Edward Snowden Twitter
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<blockquote data-quote="Ace_on_the_Turn" data-source="post: 2868566" data-attributes="member: 27417"><p>Before you start blaming the government, and I give you some credit for not just straight out blaming Obama, you might check the difference between statutory and effective rates:</p><p></p><p>The highest individual tax rate in the US is 39.6%. The highest earners pay that rate on very little of their income. Mitt Romney earned $13.5 million in 2010. He paid $1.9 million in income tax. A rate of 14%. Just like Mitt US corporations pay the 35% rate on very little of their income. The effective tax rate of US corporations is much lower than it appears.</p><p></p><p><a href="http://www.usnews.com/opinion/economic-intelligence/2015/11/13/reality-check-on-corporate-income-tax-rates" target="_blank"></a></p><p><a href="http://www.usnews.com/opinion/economic-intelligence/2015/11/13/reality-check-on-corporate-income-tax-rates" target="_blank">Are you hearing that U.S. corporations are taxed much more than their international competitors, making it harder for them to compete in global markets? Those who think so want policymakers to substantially cut corporate income taxes, protect corporate tax loopholes or both. But that claim is highly misleading to begin with, as this recent </a><a href="http://www.wsj.com/articles/pfizer-piles-profits-abroad-1447031546?alg=y" target="_blank">Wall Street Journal analysis</a> of pharmaceutical giant Pfizer's accounting methods illustrates.</p><p><a href="http://www.usnews.com/opinion/economic-intelligence/2015/11/13/reality-check-on-corporate-income-tax-rates" target="_blank">First, some background. The U.S. federal corporate tax rate is 35 percent, and that "statutory" rate is what corporate tax critics cite most often. Additional state corporate taxes bump the overall number up closer to 40 percent.</a></p><p><a href="http://www.usnews.com/opinion/economic-intelligence/2015/11/13/reality-check-on-corporate-income-tax-rates" target="_blank">The statutory rate, however, doesn't reflect the write-offs in the tax code (so-called </a><a href="http://www.cbpp.org/research/federal-tax/policy-basics-federal-tax-expenditures?fa=view&id=4055" target="_blank">tax expenditures</a>) that reduce the "effective rate" on corporate profits – that is, what corporations actually pay in taxes as a share of their profits. Indeed, while the U.S. statutory rate is about 14 points higher than the average among industrialized countries, the effective rate differential is much smaller, a Congressional Research Service <a href="http://www.fas.org/sgp/crs/misc/R41743.pdf" target="_blank">analysis</a> found.</p><p><a href="http://www.usnews.com/opinion/economic-intelligence/2015/11/13/reality-check-on-corporate-income-tax-rates" target="_blank">http://www.usnews.com/opinion/economic-intelligence/2015/11/13/reality-check-on-corporate-income-tax-rates</a></p><p>From Forbes:</p><p><a href="http://www.forbes.com/sites/taxanalysts/2015/03/25/the-truth-about-corporate-tax-rates/#7813d10120a5" target="_blank">It’s a rock-solid fact that the U.S. corporate statutory tax rate is the highest among developed nations and is significantly higher than the average. According to 2014 data from the OECD, the combined federal and state statutory corporate tax rate for the United States is 39.1 percent. The average of the other 33 members of the OECD is 24.8 percent — 14.3 percentage points lower than the U.S. rate. Weighted by country GDP, the average for these 33 countries is 28.3 percent — 10.8 percentage points lower than the U.S. rate. There is, however, an unsettled debate over whether and by how much the U.S. corporate effective tax rate is higher than effective tax rates outside the United States.</a></p><p></p><p>Anyone, like Trump, that says the US has the highest corporate tax is being very disingenuous.</p></blockquote><p></p>
[QUOTE="Ace_on_the_Turn, post: 2868566, member: 27417"] Before you start blaming the government, and I give you some credit for not just straight out blaming Obama, you might check the difference between statutory and effective rates: The highest individual tax rate in the US is 39.6%. The highest earners pay that rate on very little of their income. Mitt Romney earned $13.5 million in 2010. He paid $1.9 million in income tax. A rate of 14%. Just like Mitt US corporations pay the 35% rate on very little of their income. The effective tax rate of US corporations is much lower than it appears. [URL='http://www.usnews.com/opinion/economic-intelligence/2015/11/13/reality-check-on-corporate-income-tax-rates'] Are you hearing that U.S. corporations are taxed much more than their international competitors, making it harder for them to compete in global markets? Those who think so want policymakers to substantially cut corporate income taxes, protect corporate tax loopholes or both. But that claim is highly misleading to begin with, as this recent [/URL][URL='http://www.wsj.com/articles/pfizer-piles-profits-abroad-1447031546?alg=y']Wall Street Journal analysis[/URL] of pharmaceutical giant Pfizer's accounting methods illustrates. [URL='http://www.usnews.com/opinion/economic-intelligence/2015/11/13/reality-check-on-corporate-income-tax-rates']First, some background. The U.S. federal corporate tax rate is 35 percent, and that "statutory" rate is what corporate tax critics cite most often. Additional state corporate taxes bump the overall number up closer to 40 percent. The statutory rate, however, doesn't reflect the write-offs in the tax code (so-called [/URL][URL='http://www.cbpp.org/research/federal-tax/policy-basics-federal-tax-expenditures?fa=view&id=4055']tax expenditures[/URL]) that reduce the "effective rate" on corporate profits – that is, what corporations actually pay in taxes as a share of their profits. Indeed, while the U.S. statutory rate is about 14 points higher than the average among industrialized countries, the effective rate differential is much smaller, a Congressional Research Service [URL='http://www.fas.org/sgp/crs/misc/R41743.pdf']analysis[/URL] found. [URL='http://www.usnews.com/opinion/economic-intelligence/2015/11/13/reality-check-on-corporate-income-tax-rates'][/URL] From Forbes: [URL='http://www.forbes.com/sites/taxanalysts/2015/03/25/the-truth-about-corporate-tax-rates/#7813d10120a5']It’s a rock-solid fact that the U.S. corporate statutory tax rate is the highest among developed nations and is significantly higher than the average. According to 2014 data from the OECD, the combined federal and state statutory corporate tax rate for the United States is 39.1 percent. The average of the other 33 members of the OECD is 24.8 percent — 14.3 percentage points lower than the U.S. rate. Weighted by country GDP, the average for these 33 countries is 28.3 percent — 10.8 percentage points lower than the U.S. rate. There is, however, an unsettled debate over whether and by how much the U.S. corporate effective tax rate is higher than effective tax rates outside the United States.[/URL] Anyone, like Trump, that says the US has the highest corporate tax is being very disingenuous. [/QUOTE]
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