The cynical madness continues.
Q: When can you be sure President Barack Obama is proposing a tax increase?
A: When you hear him propose a tax cut.
On Wednesday, the president announced his plans to modify the U.S. tax code by cutting the corporate income tax rate from 35 percent to 28 percent. Our current rate is the second-highest in the OECD, and about to be the highest with Japan cutting its rate in April. Currently, our corporations’ average total income tax rate, including the typical state tax rate of just over 4 percent, gives us the highest corporate taxes in the industrialized world, above 39 percent.
If cutting the corporate income tax rate were all the president was trying to do, one might call it a good start, but only a start since the average total corporate tax rate of over 32 percent for American corporations will still be far above the OECD average of 25 percent.
As the American Enterprise Institute’s James Pethokoukis reminds us, the OECD says that of all major types of taxes, “corporate taxes are found to be most harmful for growth.”
