Yes, Sen. Sanders, We Really Do Have the Highest Corporate Tax Rate in the World

April 12, 2013

Tax Foundation Corrects Junior Senator from Vermont’s Talk Show Comments

Washington, D.C., April 12, 2013—The Tax Foundation today responded in an open letter to recent comments made by Sen. Bernie Sanders (I-VT) during an episode of the HBO talk show Real Time with Bill Maher. Sen. Sanders denied that the U.S. corporate income tax rate is the highest in the world, responding with “Who funds the National [sic] Tax Foundation?” when told that the Tax Foundation was the source for that fact.

The U.S. corporate tax rate became the highest in the developed world in April 2012, when previously-highest Japan reduced its rate below ours. This rate reflects the 35 percent federal rate combined with a weighted average of 4.1 percent in state corporate tax rates, for a total of 39.1 percent. The chart below illustrates how other countries have reduced their corporate tax rates below what once was a competitive U.S. rate.

Even when including all deductions and credits available to companies to lower their tax liabilities, the “effective” tax rate of U.S. corporations is still among the very highest in the world. The most recent studies show a U.S. effective corporate tax rate of roughly 27 percent, compared to an average of 20 percent for other developed countries. New investment is taxed in the U.S. at roughly 29.8 percent, 7.4 percentage points above worldwide competition. By any measure, the U.S. imposes a very high tax burden on its corporate sector compared to other nations.

The open letter also included a response to Sen. Sanders in regards to funding. The Tax Foundation is an independent 501(c)(3) non-partisan, non-profit organization founded in 1937. For 76 years, its mission has to been to provide tax facts and principled analysis of tax issues at all levels of government. In 2012, total revenue ($2.21 million) consisted of support from philanthropic foundations (35%), corporate contributions (34%), individual donations (16%), and events revenue (15%).

Read the full text of the Tax Foundation’s open letter to Sen. Sanders here.

The Tax Foundation is a nonpartisan research organization that has monitored fiscal policy at the federal, state and local levels since 1937. To schedule an interview, please contact Richard Morrison, the Tax Foundation’s Manager of Communications, at 202-464-5102 or morrison@taxfoundation.org.

Follow Us

Tax Policy Blog

The official weblog of the Tax Foundation.

Go

Tax By State

For information on your state, select it from the drop-down menu.

 

Ask a Tax Expert

Contact information for Tax Foundation policy staff Ask