I wish this were an April Fools' Day joke, but unfortunately it isn't. As of today, the United States has the highest corporate tax rate in the world. That honor had previously gone to Japan, whose corporate tax rate at 39.5% sat just above our 39.2%. As of today, Japan has lowered their tax rate to 38.01%.
WASHINGTON, March 30 (Reuters) - The United States will hold the dubious distinction starting on Sunday of having the developed world's highest corporate tax rate after Japan's drops to 38.01 percent, setting the stage for much political posturing but probably little tax reform.
Japan and the United States have been tied for the top combined, statutory corporate rate, with levies of 39.5 percent and 39.2 percent, respectively. These rates include central government, regional and local taxes.
Japan's reduction , prompted by years of pressure from Japanese politicians hoping to spur economic growth, will give that country the world's second-highest rate.
This doesn't bode well for the United States. We can discuss social contracts all day. We can talk about corporations 'paying their fare share'. We can debate whether anyone 'got rich on their own' in this country and is therefore morally obligated to finance more public welfare (as Elizabeth Warren is wont to do). Setting aside moral arguments, though, we should consider what impact having the highest corporate tax rate in the world will do for American competitiveness. Nothing good, that's for sure.
Even President Obama has called for a reduction in the corporate tax rate, as has Mitt Romney. In an election year, it would be great to make lowering the corporate tax rate a campaign issue.