There are five basic legal forms of business structures found in the United States: C corporations, S corporations, sole proprietorships, partnerships, and Limited Liability Companies (LLCs). In order to understand...
- The Tax Policy Blog
- Sweden to Cut Corporate Taxes: Are U.S. Lawmakers Paying ...
Sweden to Cut Corporate Taxes: Are U.S. Lawmakers Paying Attention?
If ever U.S. lawmakers need another reminder that our corporate tax rates are out of step with the rest of the world, the Swedish government announced plans to cut their corporate tax rate in 2009 to 26.5 percent from the current level of 28 percent in order to improve its business climate relative to other European nations.
In the English edition of the Swedish newspaper The Local, Liberal Party (Folkpartiet) leader Jan Björklund justified the rate cuts by saying, "Corporate tax is one of the taxes which large companies really study when they plan to set up business somewhere."
The Swedish corporate tax rate has held steady for the past decade at 28 percent while the average of European nations has fallen to 26 percent. The rate cut will be financed by unspecified reductions in existing tax breaks.
The cut in the corporate rate will be paired with a reduction in the social contribution taxes paid by employers. From Industry Week:
"The tax proposals strengthen the incentive for investment and new hires, while simplified regulations reduce companies' administrative burdens," the government said. "This, combined with other initiatives presented in the budget bill, will soften the blow of the slowing economy and mitigate the effects on the labor market," it said.
Contrast the approach the liberal Swedish government is taking to help business to the way the Associated Press describes Obama's tax plans in an AP story today:
Obama would raise payroll taxes on taxpayers with incomes above $250,000, and he would raise corporate taxes. Small businesses that make more than $250,000 a year also would see taxes rise.
Subscribe to the Tax Foundation Newsletter
Join the Tax Foundation's fight for sound tax policy Go
About the Tax Policy Blog
The Tax Policy Blog is the official blog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937. Our economists welcome your feedback. If you would like to send an e-mail to the author of a blog post, please click on that person's name to locate his or her e-mail address or visit our staff page here.