Welcome to the Tax Foundation’s CompeteUSA project.
Our goal is to raise the public’s awareness of America’s high business taxes and how the U.S. corporate tax system is affecting our competitiveness, wages, and living standards. Just 20 years ago, the U.S. led the world in cutting business taxes to make our economy more conducive to job creation. However, over the past two decades, the majority of our major trading partners have been moving toward a fundamentally different model of taxing business income. The basic tenets of this new model are lower tax rates and the exemption of foreign earnings.
The U.S. remains far behind on both of these trends. Not only do we have the highest overall corporate tax rate among the leading industrialized nations at over 39 percent, but we are one of the few remaining countries to tax on a worldwide basis.
The U.S. will continue to lose ground globally until we dramatically cut the corporate rate and move to a territorial system of taxing foreign corporate earnings.
In addition to a series of tax rate increases, 2013 also brought back a more subtle tax increase for high income earners: the Pease limitation on itemized deductions. This provision, named after the late Congressman...