The United States has the highest corporate income tax rate among the 34 industrialized nations of the Organization of Economic Cooperation and Development, the world trade group, says a new paper from the Tax Foundation.
Among 163 countries worldwide, the United States has the third-highest top marginal corporate income tax rate in the world at 39.1%, Tax-News.com reported. Only the United Arab Emirates with a 55% rate and Chad with 40% are higher corporate taxers.
Tax-News noted that the United States is one of 15 countries with a corporate tax rate above 35%, while 49 countries have rates below 20% and 10 countries are below5%.”
The report also revealed that the U.S. tax rate is currently 16.5 percentage points higher than the worldwide average of 22.6%. The average tax rate among industrialized nations has been decreasing over the past decade from a worldwide average of 29.5% in 2004. But the United States, which Chile and Hungary, are the only OECD countries that haven’t lowered their corporate tax rates since 2000.
Developing nations having higher corporate tax rates than industrialized companies may seem counterintuitive, but Tax-News reports that Europe has “the lowest average corporate tax rate by region at 18.6%, while Africa has the highest average tax rate at 29.1%.”
Tax-News warned that if the United States doesn’t lower its “exceptionally high” corporate income tax rate, it will risk losing its competitive edge in the world economy.