By American Enterprise Institute
April 1 may be a day for jokes, but on Sunday Japan ceded to the United States a distinction that is no laughing matter: the highest combined statutory corporate tax rate (state, local, and federal) in the developed world.
The United States already resided in first place for its high federal statutory rate. But with Japan’s action to reduce its federal rate even lower, their combined rate is less than the United States’.
Since the 1980s, other developed economies have been steadily lowering their tax rates, but the United States has not cut its top federal statutory rate since 1993. In the Organization for Economic Cooperation and Development, the United States is also on the high end for effective tax rates, which are the best indicators for capital investors of their true tax liability.
AEI scholars have written extensively on the issue of corporate taxation in the United States, and a sampling of their work can be found below.
Kevin Hassett and Visiting Scholar R. Glenn Hubbard have recently contributed analyses of the 2012 presidential candidates’ corporate tax reform proposals.
R. Glenn Hubbard and Kevin Hassett compare and contrast President Obama’s and Mitt Romney’s corporate income tax proposals
Kevin Hassett points out the failures of Rick Santorum’s tax plan
Kevin Hassett, Matthew Jensen, and Aparna Mathur have written extensively on the “incidence” of the corporate income tax, or in other words, on who actually bears the burden of corporate taxation.
A short article by Aparna Mathur on how the corporate tax burden falls on workers
Tax Notes paper by Matthew Jensen and Aparna Mathur summarizing the economic literature on who bears the burden of the corporate income tax
A 2010 version of Kevin Hassett and Aparna Mathur’s contribution to the corporate tax incidence literature.
Aparna Mathur and Kevin Hassett also commonly speak and write about the importance of effective rates and not just statutory rates.
Testimony submitted to the record by Aparna Mathur on why tax reform should aim to lower effective rates, not just statutory rates.
A Tax Policy Outlook by Kevin Hassett and Aparna Mathur that reports on how the United States is underperforming on both effective tax rates and statutory tax rates.
Kevin Hassett and Alex Brill conducted an influential study in 2007 on how lowering the corporate income tax rate might increase revenues for the United States. Kevin recently applied the analysis to more recent data in a 2011 Bloomberg column.
Kevin Hassett on how a corporate income tax cut might increase revenue because the U.S. is on the wrong side of the Laffer curve.
A paper by Alex Brill and Kevin Hassett on the revenue-maximizing corporate income tax rate.
States also tax corporate income, and Chad Hill tackled the issue in a 2011 paper in State Tax Notes.
Chad Hill on state-level corporate taxation.
Alex Brill recognizes the political difficulties of enacting corporate tax reform and recently constructed a tax reform plan that might appeal to both sides of the aisle.
Alex Brill’s plan for pro-growth, progressive and practical corporate tax reform.
Real Clear Markets summary of Alex Brill’s plan.
Income taxation is an inherently flawed method of raising revenues, and Alan Viard is an expert on consumption tax alternatives.
A 2008 primer on consumption taxation and the Bradford X-Tax
Alan Viards’ forthcoming, co-authored book is “Progressive Consumption Taxation: The X-Tax Revisited”
This article appeared on AEI website