What to do about corporate tax rates represents a key difference between Obamanomics and McCainomics. John McCain wants to cut them. Barack Obama wants to raise them, at least on oil companies, through a windfall profits tax. But maybe they're both wrong. Maybe we should just get rid of these levies altogether. Here are 20 reasons why it's time to sack the corporate income tax:
1) The United States has the second-highest corporate tax rate in the world, just shy of 40 percent when you combine state and federal taxes.
2) The U.S corporate tax rate is 50 percent higher than the average for Organization for Economic Coordination and Development member states.
3) Japan, the country with the highest corporate tax rate, is thinking about cutting its rate.
4) Some 70 percent of the corporate tax burden is borne by workers in the form of lower wages and fewer high-paying jobs.
5) China just cut its corporate tax rate from 33 percent to 25 percent.
6) Fewer than 4 percent of large U.S companies paid no corporate income tax in 2005, according to a recent study.
7) A new OECD study found that corporate taxes are the most damaging kind of tax.
8) Corporate taxes lead to double taxation. Profits are taxed a first time at the company level and then again as dividends.
9) OECD data shows that nine of the 30 OECD member nations, including Canada, Germany, New Zealand, Spain, the United Kingdom, Italy, Switzerland, the Czech Republic, and Iceland, have lower corporate tax rates in 2008 than they did in 2007.
10) In 2007, 20 non-OECD countries, including Israel, Bulgaria, and Turkey, cut their corporate income taxes.
11) The OECD has found that corporate taxes are most onerous for dynamic, high-growth companies that are challenging more established firms.
12) The OECD recommends that countries move away from corporate and personal income taxes toward consumption taxes.
13) An EU study of 50,000 companies found that a 1 percent increase in marginal corporate income tax rates leads to a 0.92 percent decrease in real wages.
14) It's bipartisan. Among people who have called either for a reduction in or elimination of corporate taxes are John McCain, Charlie Rangel, Jimmy Carter, Ronald Reagan, Milton Friedman, Lester Thurow.
15) It's a hidden tax: Even workers get hit by it, but they don't know it because they don't directly pay the tax.
16) Some 30 percent of the corporate tax burden is borne by shareholders.
17) Many companies pay more in accountants' fees to file their taxes than they do in taxes.
18) For every dollar the government collects in revenue, the corporate tax may actually cost the government $1 in revenue through slower economic growth.
19) Eliminating corporate taxes would help offset the burden of environmental taxes from cap-and-auction plans.
20) Next year, 2009, will be the 100th anniversary of the U.S. corporate tax. What better time to eliminate it?