state corporate taxes; new study

http://www.taxfoundation.org/publica...how/23015.html

New Study: U.S. States Suffer as They Become Biggest Corporate Taxers in the World

WASHINGTON, Mar 18, 2008 - A new study from the Tax Foundation, a nonpartisan tax research group in Washington, shows that most American states tax job providers at a higher rate than any other country in the developed world. "This is startling news for America's businesses and workers," said Tax Foundation president Scott Hodge, the study's author. "Tax competition for jobs and investment is fierce, and the U.S. continues to fall further and further behind. Our states should be the world's leaders in many things, but high taxation should not be one of them. The high federal corporate tax rate is literally crushing states' competitive abilities. That means fewer jobs for American workers." Counting the federal rate alone, the U.S. has the world's highest corporate tax rate, but including average sub-national rates (federal plus state in the U.S.), Japan edges out the U.S. for the highest-tax location (see table). This new study breaks the tax down state-by-state, adding each state's corporate tax rate to the federal corporate tax rate. The results show that 24 states impose, when combined with the federal rate, a higher business tax rate than in any other nation. In fact: 24 states have a combined corporate tax rate higher than top-ranked Japan. 32 states have a combined corporate tax rate higher than third-ranked Germany. 46 states have a combined corporate tax rate higher than fourth-ranked Canada. All 50 states have a combined corporate tax rate higher than fifth-ranked France. "If federal lawmakers are serious about making the U.S. corporate tax system more competitive globally, they will have to partner with state officials to lower the nation's overall corporate tax burden," Hodge added. "Likewise, state officials should have a vested interest in cutting the federal corporate tax rate because there is only so much they can do to improve their own competitiveness. After all, even corporations in the three states that do not impose a major state-level corporate tax—Nevada, South Dakota, and Wyoming—still shoulder a higher corporate tax rate than France, and 25 other major countries, because of the 35 percent federal corporate rate." The table below lists each state's combined corporate tax rate, and then compares them (bolded) with the rates of our major trading partners and competitors.

Take a look at the numbers, and do you really think the companies pay the taxes/


No.

More Evidence That Corporate Tax Cuts Help Workers by William Ahern A new study from three prominent economists finds that employees suffer most when their corporate employers must pay high corporate taxes. That contradicts the theory that has prevailed for decades -- that corporate taxes mainly hurt investors -- but it supports a recent CBO study by Randolph that found workers bearing 70 percent of the burden of corporate income taxes. The new study's authors are Fritz Foley and Mihir Desai of Harvard and James Hines of the Univ. of Michigan, and their study is titled "Labor and Capital Shares of the Corporate Tax Burden: International Evidence." They first presented it to the Brookings Institution in December, and yesterday, March 17, they presented it to the American Enterprise Institute. They find that the workers' share of the corporate tax burden ranges from 45 to 75 percent. This provides more intellectual ammunition to the growing group of lawmakers who are arguing that the U.S. needs a lower corporate income tax rate, a group that includes Ways and Means Committee Chairman Charles Rangel (D) and Senator John McCain (R). The Tax Foundation has recently compared U.S. corporate income tax rates, both federal and state, to the rates levied around the world, finding that U.S. taxes are either highest (federal only) or second highest (federal plus state).

http://www.taxfoundation.org/blog/show/23022.html