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Corporate taxes are already low, according to one CEO
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By: Teri Bernstein

 

 

 one way to compare EFFECTIVE corporate tax rates; Tax Foundation

 

A superficial assessment of corporate income tax rates might find that corporate tax rates are high, compared to those of other countries. But a deeper analysis of tax rates includes not only the top stated rate on corporate net income, but also:

  • the allowed deductions in determining taxable income
  • payroll taxes
  • value-added taxes, if any
  • "pass-through" tax rates for private corporations to owners
  • state and local tax rates
  • the ability to shelter income in other countries and avoid tax completely. 

Lisa Goldenberg, CEO of the privately held Delaware Steel Co., shared her views with Marketplace about the corporate taxation problem being primarily with the corporate cash that is held in other countries to avoid taxation: 

 

"Well, let's be honest. Corporate taxes are pretty low anyway. They're talking about lowering corporate taxes, but fundamentally, corporate taxes are extraordinarily low...I would say in a more macro view, if you look at repatriating money and they come up with a way to bring that cash back. Let me say this, that if we don't figure out a way to get that money back in this country, the European Union is going to figure it out, because they've got it right now on the floor being debated...We have to sort of balance that out. And that money would really affect my business, because that money will help balance our economy."

 

For another view of one corporation's low tax rate, here is an analysis of Starbucks: 

 

 

Source: "'Let's be honest. Corporate taxes are pretty low,' this CEO says," by Kai Ryssdal and Shaheen Ainpour, Marketplace: American Public Media, October 5, 2017.

 

Discussion: 

  • Why is it hard to compare business taxes over time, and among countries? List the issues.
  • Try to draw some conclusions about how low or high corporate tax rates are. Do you agree with the Lisa Goldenberg about the crux of the corporate tax issue? Explain why or why not.