A recent study by the Tax Foundation finds that 24 States, when their corporate tax rates are combined with the Federal rate of 35%, have the highest such tax rates in the 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.’”
When cross-referenced with the ALEC-Laffer State Economic Competitiveness Index, 79% of the States with the highest corporate tax rates in the world rank in the bottom half of ALEC-Laffer’s overall rankings for 2007 of individual States. This is beyond correlation; such a high rate demonstrates causation between high tax rates and overall economic performance.
And folks wonder why businesses are going overseas!
ALG Perspective: This is a no-brainer. When businesses are over-taxed, they go do business elsewhere, and it hurts the economic performance of the States with those high rates. If the U.S. wants to remain competitive in the global marketplace, and to create new jobs in the economy, it needs to slash corporate tax rates and make America the best place to do business in the world.
