Posted on 04/02/2012 6:40:26 AM PDT by IbJensen
There aren’t many American-owned companies more iconic than Anheuser-Busch, the famous producer of Budweiser beer based in St. Louis, Missouri. That was true up until 2008, when the Brazilian-Belgian company InBev executed a hostile takeover of the historic brewer, leading to layoffs of more than 1,800 workers.
Unfortunately, conditions in the United States are growing ripe for even more takeovers like these to occur, especially now that the nation’s corporate tax rate is officially the highest in the world.
As of yesterday, the U.S. corporate tax rate of 39.2 percent claimed the world’s top spot, edging out Japan which recently lowered its rate from 39.5 percent to 36.8 percent. (The U.S. rate includes the 35 percent federal rate plus the average rate the states add on.) That’s well above the 25 percent average of other developed nations. Heritage’s Curtis Dubay explains the impact on companies based in the United States:
This gaping disparity means every other country that we compete with for new investment is better situated to land that new investment and the jobs that come with it, because the after-tax return from that investment promises to be higher in those lower-taxed nations.
Our high rate also makes our businesses prime targets for takeovers by businesses headquartered in foreign countries, because their worldwide profits are no longer subject to the highest-in-the-world U.S. corporate tax rate. Until Congress cuts the rate, more and more iconic U.S. businesses such as Anheuser-Busch will be bought by their foreign competitors.
Unfortunately, in the face of this tax rate, the Obama Administration is proposing measures that will make matters even worse for U.S. companies. Last week, Vice President Joe Biden proposed a “global minimum tax” in a wrongheaded effort to encourage companies to invest in the United States instead of overseas.
Just like the rest of President Obama’s corporate tax policy, it will just make matters worse — punishing firms that seek new opportunities in growing markets by taxing their earnings in those developing markets even more heavily than they’re already taxed. The net result will be to make it even more likely that the companies’ assets would go up for sale to overseas firms in order to escape the Obama tax penalty. Unfortunately, America’s workers pay the price for this destructive tax policy. Heritage’s J.D. Foster explains why:
Economists and policymakers increasingly understand that while the tax is paid almost exclusively out of profits that would otherwise go to the shareholders, the true economic burden falls primarily on workers.
The reason is simply that the higher the effective corporate tax burden, the higher the hurdle rate on corporate investment. (The hurdle rate is the minimum rate a business must earn on investment to make the investment.) The higher the hurdle rate, the less investment takes place. The less investment takes place, the slower labor productivity grows, and the slower labor productivity grows, the slower wages grow.
Congress should act now to help make America more competitive on the global stage, and it can do so by reducing the corporate tax rate to match or preferably fall below the international average. The U.S. economy is struggling to recover from the global recession, and by lifting the burden of record-high corporate tax rates, Congress can give American companies incentive to grow and expand here at home. If not, the American people can expect to see more companies like Anheuser-Busch bought up by international competitors — and the jobs will go right along with them.
If only we could roll everything back to pre-1913.
Taxes are so damned onorous in this falling, failing nation that we must consider that when one buys a house and pays the amount asked, that house is never owned by the buyer. Rather, the 'owner' is a tenant. Try not paying the property taxes on that residence and you'll end up out on the street. Property taxes are just a symptom of the evil of taxes.
Each and EVERY one in Congress must be voted out! Our once great Country has been bloodied and left for dead while the buzzards are circling to pick our bones. I’ve never been so angered, so full of hatred for all the America killers, all the disgusting leftists who have engineered and cheered on our dying Nation. There are still so very many brain-dead takers in America now, nothing seems to be able to stop this road to oblivion and disgrace.
I will say that 39% is way too much, but on the other hand, what was the effective rate paid by GE last year, about zero.
If there has to be a corporate income tax, maybe it should be 1 to 5 percent on the gross income instead of 39% on the net?
Highest Taxes in the world.....
Highest Debt in the world.....
I think I see the problem.................
We also need to acknowledge the fact that are equipment is also being transported to these lower taxed countries as well.
Corporations don’t pay taxes.
Their customers do................
Are should be our.
Are should be our.
the problem is that the tax code is huge and there are loopholes. There should be a simple flat tax, with no concessions etc., just a two-pager. The amount of money and time spent on poring over the IRS rules is crazy.
I personally think the GOP spends way too much time worrying about corporate taxes. They’re obviously too high but corporations aren’t the only ones paying too much. That’s why I like Rick Santorum’s idea of eliminating the tax on manufacturers. Its a direct job creator.
Its important to note that manufacturing is part of the corporate structure so corporate would end up with a huge cut between manufacturing and corporate.
“Tray-von could be my son,” said a feckless, extremely stupid phony American President in his effort to fan the fires of race war.
Tray-von couldn’t be your son you idiot. He’s someone else’s son in a hood and with an attitude.
We’re surprised with your mixed up background with drugs and homosexual experimentation that you’ve fathered two daughters.
The picture of cute little Tray-von was taken when he was 12-years-old. A later photo shows a 6’2” thug in a hood with his pants bunching up around his ankles. He is yet another of the millions of negro youth that are a problem in America that will never be dealt with.
We’ve spent so much money and worthless effort on saying that diversity is what makes America great that we’ve began to believe this lie. Diversity and taxes are killing America in education, business, military; literally every phase of American life.
Let's face it: America as a melting pot has boiled over and is scalding every facet of our lives.
I tried a little experiment of my own a handful of years back. I called three different IRS offices located in two cities other than my own (so, three offices altogether). I asked each office about home office deductions with the exact same question and got three completely different answers from each office. The IRS can’t even explain its own tax code let alone convey it consistently.
Very well stated and thank you for posting, America is bleeding to death and no one seems to care except people such as you. God help our Country!!
the problem is that it is too complicated for any one person to handle..
“Corporations don’t pay taxes. Their customers do.”
well, should we drop the fiction that corporations are legal individuals?
http://www.usgovernmentrevenue.com/piechart_2011_US_fed
Chart shows for 2011 income taxes were 55% of the Federal Government revenue, 1,273B “Businesses & Others” 4%, 82.5B So, just increase personal income taxes by 6.4%. Are you up to a 6.4% increase in taxes? Will corporations drop their average cost of goods & services by the amount of savings?
It gets even more interesting on the state/local side, where personal income taxes are 339.4B and “businesses & others are 661.5B. The increase to personal taxes there would be 194%. Again, I ask, do you want your personal income tax increased by that much?
The point is, you are already paying the taxes every time you buy some goods or services from the corporations. It’s included in your purchase price.
Just like the ‘fiction’ that renters don’t pay property taxes. Fact is that they pay all of the property owners’ taxes on the property thru their rent............
If that's the case, then the cost of buying Bud and related brands should be going down since the InBew has a lower tax burden.
The cost of Bud will be going down, but not because of actual costs, but because the demand is going down. Too much supply necessitates a lower price.......
What is ‘InBew’?.................
Sorry. Fat fingers. InBev
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