Michigan has been tangled up in a transportation funding back-and-forth for the last year or so. The most recent episode was a May ballot initiative to raise sales and gas taxes that failed 80-20. As of yesterday, news...
- The Tax Policy Blog
- U.S. May Soon be Number 1 as Japan Looks to Cut Corporate...
U.S. May Soon be Number 1 as Japan Looks to Cut Corporate Taxes
Bloomberg is reporting that the U.S.'s status as the country with the second-highest overall corporate tax rate among industrialized nations could be coming to an end as the Japanese government has announced that it will consider cutting its top-ranked corporate tax in order to attract foreign investment and spur economic growth. http://www.bloomberg.com/apps/news?pid=20601068&sid=a0c9fhwz8QBU&refer=home
While the OECD average corporate tax rate is 27.6 percent, Japan's combined federal and regional corporate tax rate is 39.5 percent, slightly above the combined U.S. rate of 39.3 percent. Both countries are looking more and more as outliers as 27 countries cut their corporate taxes last year -- including the U.K., Germany, China, and Spain -- while Korea, Taiwan, and Hong Kong have announced plans to cut their corporate taxes this year.
Bloomberg cites a new study by the Dai-Ichi Life Research Institute, which estimates that a "5 percentage-point cut in Japan's corporate taxes would increase foreign direct investment by 12.7 percent in a year and add about 3.8 trillion yen to the economy over six years."
The government will consider broadening the tax base as one means of financing the rate cuts since only a third of Japanese companies actually pay corporate taxes.
Get Email Updates from the Tax Foundation
We will never sell or share your information with third parties.
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.