Taxes

America Has a Really, Really Lousy Tax Environment, Says New Report

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IRS
Joshua Doubek

Remember all of that "inversion" buzz about nasty, greedy corporations relocating overseas to escape their patriotic duty to be milked by the United States government? "Even as corporate profits are higher than ever," President Obama told us, "there's a small but growing group of big corporations that are fleeing the country to get out of paying taxes."

But…Could it be that those companies—and individuals—are fleeing because the United States tax system so truly sucks that it isn't even slightly competitive with the deals offered by other countries? Let's see what the Tax Foundation has to say on its new International Tax Competitiveness Index:

The United States places 32nd out of the 34 OECD countries on the [International Tax Competitiveness Index]. There are three main drivers behind the U.S.'s low score. First, it has the highest corporate income tax rate in the OECD at 39.1 percent. Second, it is one of the only countries in the OECD that does not have a territorial tax system, which would exempt foreign profits earned by domestic corporations from domestic taxation. Finally, the United States loses points for having a relatively high, progressive individual income tax (combined top rate of 46.3 percent) that taxes both dividends and capital gains, albeit at a reduced rate.

That puts us behind Italy, but ahead of Portugal and France. Yay.

The Index squares remarkably well with the shitty rating the United States gets from PricewaterhouseCoopers in its international rankings of ease of paying business taxes.

PwC

Maybe, just maybe, people have growing reason to think the land of opportunity has an overseas address.

No wonder American voters are down in the dumps over the country's economic prospects.

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  1. How about incredibly complicated to boot?

    1. And right now, our heroes and saviors, Moobz and Obumbles are working on a brave new plan to make the tax code even more burdensome and cumbersome.

      People can keep saying that America is the greatest ever, too great to ever fail no matter what we do, blahblah, but other countries are going to start taking advantage of this and the USA as we have known it will be done. And our elected rulers are going to make damn sure it happens as quickly as possible.

      1. God yes, I read that–can’t remember where. Has there ever been a tax law that actually simplified the Code?

  2. Off topic: Anyone else using Firefox and finding Reason *extremely* slow loading and CPU hogging today?

    1. No lag here. Firefox + Adblock = smooth sailing.

    2. Use Chrome and install Ghostery. It will be blazing fast compared to what it was.

      1. Also, without reasonable, the site pretty much sucks anyway.

      2. Thanks for the tip.

    3. “Waiting for doorbell.io…” prevents the page from completely loading for several seconds.

      1. Great, now it’s “Read ssl.gstatic.com”

  3. About 98% of our tax code is social engineering, based on the premise that people respond to incentives.

    Of course, when the social engineers discover that people are fleeing, they are shocked to discover that people respond to incentives.

    1. Never underestimate the power of doublethink. Also, intent is magic.

    2. They’ll be building that wall soon enough to keep those illegal Mexicans out us in.

      1. If you don’t like it you can leave, upon paying the appropriate fee.

    3. 98% of our tax code is based on payoffs to various crony interests.

      You give them too much credit.

      1. Exactly. Much less social engineering than pure cronyism.

    4. “Gee, we punish the middle class with taxes and red tape, and we reward the poor with handouts, and yet, for some reason, we seem to have more poverty and fewer people moving up to the middle class. It’s a mystery, I tell you, a mystery!”

      1. So, the solution is we just need to do more of it and give it to them good and hard and it will work then.

    5. Pithy quote about demonstrating to men how little they know about what they imagine they can design.

      We have apparently fallen short on the demonstrating bit. Thankfully, the planners are picking up the slack for us by doing their best imitation of FDR.

  4. I always laugh at these people who cry about inversions and try to pawn off the idea that corporations looking to lower their tax burden is treason. Ask these same toolboxes whether they fill out a 1040EZ and you’re typically treated with stupified silence or a never-ending spiel of double-talk and rationalizations.

    1. But corproationz aren’t people!!!!!!

      1. Yet, the progs want them to be “patriotic” like people.

    2. Didn’t Team Obama engineer an inversion for the country’s third largest automobile manufacturer? In fact, they even subsidized the inversion of Chrysler.

      1. Excellent point. Never thought of it, but the Fiat deal would be it.

        The whole auto bailout was one big tax pretzel – GM got to go through bankruptcy, but keep previous tax losses on the books of the new company. A total re-write of tax law by courts and RATner.

        You also won’t see progs complain that Buffett is involved as he keeps telling everybody taxes don’t matter in business.

      2. They also specifically organized the inversion of Delphi, the auto parts supplier that was spun off of GM.

  5. Remember all of that “inversion” buzz about nasty, greedy corporations relocating overseas to escape their patriotic duty to be milked by the United States government?

    Yeah. And I also remember learning how the entire dust-up was a sham that was more about helping a foreign company working with the administration’s cronies at Morgan Stanley and Evercore Partners to prevent being acquired by an American company. So much for economic patriotism.

    http://blogs.wsj.com/pharmalot…..nversions/

  6. Corporations and the 1% don’t actually pay that much in taxes because garble garble mmm Obama’s cock garble garble.

    /every one of our leftist trolls

    1. But of course their proposed remedy is higher taxes/tax rates.

  7. We can’t lower the taxes though, otherwise the deficit would be a few hundred billion more than it already is!

    1. Krugman proposes a balanced budget in which federal spending equals 100% of national GDP.

  8. Maybe, just maybe, people have growing reason to think the land of opportunity has an overseas address.

    When do we start building a wall to keep these traitors in?

    1. A prog-relative of mine actually suggested this. I reminded him of how well that worked out for China.

      1. Damn you Mongorians you break down my shitty wall for the last time!

  9. Corporate tax inversions show one thing: businesses have moved about all the manufacturing facilities they can move overseas, and now they’re relocating their corporate offices. They continue to abandon the American economy for environments of lower total production costs. That’s thanks to NAFTA and other “free-trade” agreements.

    We continue to be afflicted with the Idiot’s Theory of Economics. That is the theory that the role of producing goods doesn’t matter– that it is irrelevant whether we keep our factories, capital, and jobs here, or whether those things are packed up and shipped to foreign countries. As a result of this half-baked notion, China has become wealthy, and we are $18,000,000,000,000 in debt.

    Six million jobs have departed from our shores, while Congress has been in denial, refusing to admit reality. They continue to intone, “Everything’s fine, it’s free trade, all is for the best in this best of all possible worlds.” But in the real world, poverty and debt are unhindered by half-baked theory.

    1. Larry E|9.15.14 @ 6:54PM|#
      …”But in the real world, poverty and debt are unhindered by half-baked theory.”…

      Uh, Larry, the problem you have is your ‘theory’ has been ‘baked’ to a cinder many times; you’re spouting crappola that’s been debunked many times over many years.
      Please go grow lichen to eat on the rocks in your back yard and let those of us who trade do just fine.
      IOWs, buzz off.

      1. You stupid and nasty response makes no point at all. What are you — some kind of economic troll.

  10. Got distracted by the latest protectionist there…
    Anyhow, I’ll bet you didn’t know that CA has ‘fair’ taxes! I didn’t, but a lefty hack in the local rag says so:

    “California taxes aren’t low, but among the ‘fairest’ in the country”
    […]
    “Conservatives love to rip California for its high tax rate. But a new study out Monday says that California has the eighth-most “fair” tax system in the country.”
    http://blog.sfgate.com/techchr…..e-country/

    His email addy is there; he could use some education. Pretty sure he’s blocked me after I pointed out that he’d capsized to port.

  11. I prefer to pay 20% flat tax.
    YMMV.

  12. Second, it is one of the only countries in the OECD that does not have a territorial tax system, which would exempt foreign profits earned by domestic corporations from domestic taxation.

    “One of the only countries” is not a number. It’s not even a coherent grouping. While I agree with the Tax Foundation’s premise on territorial tax systems, that’s a poorly-worded argument. If they want to make comparison point on territorial tax systems, they need to show how many lack territorial taxes and discuss economic performance.

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