The 39.3 percent corporate tax rate in the United States is very high by world standards, exceeded only by Japan. This is very damaging for job creation and prosperity – and it becomes an even bigger problem every time another nation lowers its corporate rate. The latest nation to move in the right direction is
New Zealand, which is dropping its rate to 30 percent, according to Tax-news.com:
An important initiative in the government’s ongoing programme to strengthen the economy takes effect on April 1st, 2008, when the company tax rate drops to 30%, Finance Minister Michael Cullen and Revenue Minister Peter Dunne announced on Monday. “Reducing the company tax rate will allow successful businesses to re-invest a greater share of their profits in new technologies and in further building-up the skill base of employees,” Dr Cullen stated. “We expect that lowering of the company tax rate will serve to strengthen the competitiveness of New Zealand-based companies, and that is good for the long-term interests of all New Zealanders,” Dunne added. The cut to the company tax rate to 30% (from 33% previously) represents the first time the company tax rate has been reduced in New Zealand since 1988.