Reader Marcus Choudhary has urged me to mention, amid all this talk about the sweet tax deal that private equity firms and private equity partners get, that corporate tax rates in the U.S. are pretty high. So if the folks at the House Ways and Means and Senate Finance committees really want to make our tax system more consistent and fair, they might want to consider cutting taxes on corporations as they raise them on the private equity guys.
Fat chance of that, of course, especially with lawmakers looking for ways to bring in more money. Although I do wonder whether, with U.S. corporate tax rates among the highest in the world and corporations getting ever more adept at shifting income around to reduce taxes, we might actually get an increase in revenue by cutting corporate rates. You know, like Arthur Laffer says we would.
Of the 30 members of the OECD, here are the top five and bottom five when it comes to corporate income tax rates (rates are averages and include state and local taxes; you can get the full list here) in 2006:
Top 5
Japan 39.54%
U.S. 39.3%
Germany 38.9%
Canada 36.1%
Spain 35%
Bottom 5
Ireland 12.5%
Hungary 16%
Iceland 18%
Slovak Republic 19%
Poland 19%