Tax Foundation: On April 1, U.S. Is #1 (World's Highest Corporate Tax Rate)

The Tax Foundation has released Countdown to #1: 2011 Marks 20th Year That U.S. Corporate Tax Rate Is Higher than OECD Average:

There is increasing recognition in Washington that the U.S. corporate tax rate is out of step with the lower tax rates of most industrialized and emerging nations. Indeed, 2011 marks the 20th year in which the U.S. statutory tax rate has been above the simple average of non-U.S. countries in the Organization for Economic Cooperation and Development (OECD).

It is now well known that with a combined federal and state corporate tax rate of 39.2%, the U.S. has the second-highest overall rate among OECD nations. Only Japan, with a combined rate of 39.5%, levies a higher rate.

As Figure 1 indicates, the simple average of non-U.S. OECD nations has fallen from 38% in 1992 (the first year in which it fell below the U.S. rate) to 25.5% today. Similarly, the weighted average—which accounts for country size—has fallen from 42.5% in 1992 to 30.1% today. The weighted average rate of non-U.S. countries fell below the U.S. rate in 1998. Thus, 2011 marks the twelfth straight year in which the U.S. has been above the weighted average rate.

These figures and rankings do not reflect the changes that have occurred this year or will take place later in the year. On January 1, 2011, Canada's national corporate tax rate was reduced from 18% to 16.5%, which gives the country an overall rate of 28%. On April 1, both Japan and the United Kingdom are scheduled to lower their rates as well. Japan is planning to reduce its national rate by 4.5 percentage points, which will bring its overall rate to below 35%. The U.K. rate will fall from 28% to 27% as a first step of a multi-year plan to lower the British rate to 24% by 2014.

After the scheduled rate cuts in Japan and Great Britain take effect, the simple average of non-U.S. OECD nations will drop to about 25% percent and the weighted average will hit 29%. This will leave the U.S. rate a full 10 percentage points higher than the weighted average of our major economic competitors.

Table 1: Corporate Tax Rates in OECD Countries

Country	2010 Rate	2010 Rank	2000 Rate	2000 Rank	Rate Change	Rank Change
Japan	39.54	1	40.87	3	-1.3	2
United States	39.2	2	39.3	6	-0.1	4
France	34.43	3	37.76	7	-3.3	4
Belgium	33.99	4	40.2	4	-6.2	0
Germany	30.2	5	52.0	1	-21.9	-4
Mexico	30	7	35	11	-5.0	4
Spain	30	9	35	13	-5.0	4
Australia	30	6	34	14	-4.0	8
New Zealand	30	8	33	16	-3.0	8
Canada	29.52	10	42.57	2	-13.1	-8
Luxembourg	28.59	11	37.45	8	-8.9	-3
United Kingdom	28	13	30	23	-2.0	10
Norway	28	12	28	26	0.0	14
Italy	27.5	14	37	9	-9.5	-5
Portugal	26.5	15	35.2	10	-8.7	-5
Sweden	26.3	16	28	27	-1.7	11
Finland	26	17	29	24	-3.0	7
Netherlands	25.5	18	35	12	-9.5	-6
Austria	25	19	34	15	-9.0	-4
Denmark	25	20	32	18	-7.0	-2
Korea	24.2	21	30.8	20	-6.6	-1
Greece	24	22	40	5	-16.0	-17
Switzerland	21.17	23	24.93	28	-3.8	5
Turkey	20	24	33	17	-13.0	-7
Czech Republic	19	25	31	19	-12.0	-6
Poland	19	27	30	22	-11.0	-5
Slovak Republic	19	28	29	25	-10.0	-3
Hungary	19	26	18	30	1.0	4
Chile	17	29	15	31	2.0	2
Iceland	15	30	30	21	-15.0	-9
Ireland	12.5	31	24	29	-11.5	-2