Over the weekend Japan decreased it's corporate tax rate of 39.5% to 36.8% which had made it the highest country in the world. By dropping their rates the US officially moves into the number one spot as having the highest corporate tax rates in the world at 39.2%. We all know that there are legal ways that corporations and individuals for that matter can decrease the taxes they owe so they are not paying the full rate thanks to an unlimited supply of loopholes.
Part of the reason that I believe the economy is muddling through right now is because of the cumbersome tax system we currently have in place. The government does not send a clear picture as to what taxes are necessarily going to be so how can people make decisions? The government reduces taxes for a period of time on specific items say capital gains or capital spending. Congress then goes on to debate about whether or not those tax breaks should be extended, eliminated, or brought back in full.
Neither the Republicans or the Democrats have the backbone for tax reform and a person such as Ron Paul who is the biggest supporter of tax reform doesn't have the support to be seriously considered for the highest office. If there could be some type of bi-partisan collaboration then maybe we could take some steps forward. However, I'm not holding my breath.
Here is a brief piece from The Heritage Foundation on this very issue.
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