ManuFACTS: Corporate Tax Rates
ManuFACTS: Corporate Tax Rates A Lower Corporate Tax Rate Will Stimulate Economic Growth and Job Creation
• The United States has the second-highest statutory corporate tax rate among developed nations. One of the most important things policymakers can do to create a competitive U.S. tax climate is to reduce the federal corporate tax rate to 25 percent or lower. • Reducing the U.S. corporate tax rate will stimulate economic growth and job creation. According to a study released by the Milken Institute in January 2010, a reduction in the combined U.S. statutory corporate tax rate to 27 percent (the average rate in the OECD) could boost GDP by 2.2 percent and increase total employment by 2.13 million workers. • In recent years, nearly 60 countries have cut their corporate taxes to encourage economic growth. At the same time, the combined U.S. statutory corporate tax rate has stayed at almost 40 percent. By standing still, the United States is falling behind. • Manufacturers are encouraged by the current bipartisan interest in lowering the corporate tax rate. While we acknowledge that lower rates likely will be coupled with some broadening of the corporate tax base, the NAM strongly opposes any approach to tax reform that would result in a higher tax burden on manufacturers.
How Congress and the Administration Can Help Support reducing the U.S. corporate tax rate to 25 percent or lower, without increasing the tax burden on manufacturers.
1331 Pennsylvania Ave NW, Suite 600, Washington, DC 20004
P
202• 637• 3000
F
202• 637• 3182 www.nam.org
Corporate income tax policy simulation
Corporate income tax policy simulation
Impact on real GDP Billions of chained 2005$
Impact on employment Percent
2.5
400
2.5 Non-manufacturing Manufacturing
300
2.0
2.0
1.5
1.5
1.0
1.0
0.5
0.5
0.0
0.0
200
100
0
20 10 2011 2012 2013 20 14 2015 2016 2017 20 18 2019
201 0 2011 2012 2013 2 014 2015 2016 2017 2018 2019 Sources: U.S. Bureau of Labor Statistics, Milken Institute.
Sources: U.S. Bureau of Economic Analysis, Milken Institute.
Bottom Line Other countries have been regularly lowering their tax rates to encourage economic growth. The current focus on tax reform presents a great opportunity to advance a lower corporate tax rate that would go a long way to improving the global competitiveness of U.S. manufacturers, stimulating economic growth and job creation and making the United States a more attractive location for business investment.
More Information Web: www.nam.org/technology E-mail: [email protected]
June 23, 2011
• The United States has the second-highest statutory corporate tax rate among developed nations. One of the most important things policymakers can do to create a competitive U.S. tax climate is to reduce the federal corporate tax rate to 25 percent or lower. • Reducing the U.S. corporate tax rate will stimulate economic growth and job creation. According to a study released by the Milken Institute in January 2010, a reduction in the combined U.S. statutory corporate tax rate to 27 percent (the average rate in the OECD) could boost GDP by 2.2 percent and increase total employment by 2.13 million workers. • In recent years, nearly 60 countries have cut their corporate taxes to encourage economic growth. At the same time, the combined U.S. statutory corporate tax rate has stayed at almost 40 percent. By standing still, the United States is falling behind. • Manufacturers are encouraged by the current bipartisan interest in lowering the corporate tax rate. While we acknowledge that lower rates likely will be coupled with some broadening of the corporate tax base, the NAM strongly opposes any approach to tax reform that would result in a higher tax burden on manufacturers.
How Congress and the Administration Can Help Support reducing the U.S. corporate tax rate to 25 percent or lower, without increasing the tax burden on manufacturers.
1331 Pennsylvania Ave NW, Suite 600, Washington, DC 20004
P
202• 637• 3000
F
202• 637• 3182 www.nam.org
Corporate income tax policy simulation
Corporate income tax policy simulation
Impact on real GDP Billions of chained 2005$
Impact on employment Percent
2.5
400
2.5 Non-manufacturing Manufacturing
300
2.0
2.0
1.5
1.5
1.0
1.0
0.5
0.5
0.0
0.0
200
100
0
20 10 2011 2012 2013 20 14 2015 2016 2017 20 18 2019
201 0 2011 2012 2013 2 014 2015 2016 2017 2018 2019 Sources: U.S. Bureau of Labor Statistics, Milken Institute.
Sources: U.S. Bureau of Economic Analysis, Milken Institute.
Bottom Line Other countries have been regularly lowering their tax rates to encourage economic growth. The current focus on tax reform presents a great opportunity to advance a lower corporate tax rate that would go a long way to improving the global competitiveness of U.S. manufacturers, stimulating economic growth and job creation and making the United States a more attractive location for business investment.
More Information Web: www.nam.org/technology E-mail: [email protected]
June 23, 2011
