High Taxes and No Borders for U.S. Companies

Published July 1, 2009

The average U.S. corporate income tax rate of 39.25 percent (state and federal taxes combined) is the second-highest among the 30 industrialized countries in the Organisation for Economic Co-operation and Development.

In addition, whereas the United States taxes income earned by corporations anywhere in the world, most U.S. competitors tax income only if it is earned within their borders. The only OECD nation with a higher corporate tax rate than the United States—Japan—announced earlier this year that it would move to such a territorial taxation system. The United Kingdom announced a similar move a few weeks later.

— Steve Stanek