No Taxation Without Ramifications
Posted on March 10, 2011 in CBIZ Solutions+
What’s on the watch list for 2011? Plenty.
Marie Leone – CFO Magazine
February 1, 2011
The Bush tax-cut debate may have captured the headlines leading up to the new year, but there are at least half a dozen lower-profile tax issues that CFOs should keep tabs on, with more to come as the year unfolds.
The most important is, no doubt, the corporate tax rate. Japan plans to cut its corporate rate by 5 percentage points in April, which will give the United States the dubious honor of having the highest corporate tax rate in the world. (The Organization for Economic Cooperation and Development calculates member country tax rates by looking at national levies, and then taking into consideration the deductibility of average state taxes.) As a result, the United States now tops the list with a 39.2% corporate tax rate, ahead of Japan’s 35%.
American companies have long complained that the high tax rate is a competitive disadvantage. To cite but one example, other G7 countries exempt foreign business income — or at least 95% of the income — from the corporate tax base, says Andrew Lyon, a principal in the national economics and statistics group at PwC U.S.