Tax Law

Obama's Rate Cut: How Low Can You Go?

President Obama's newly released 'framework' for corporate tax reform envisions a significant rate cut for U.S. firms. You can read the details at the President's Framework for Business Tax Reform. His basic idea is to lower the statutory rate from 35% to 28%. He's vague on the details of how to pay for the rate cut -- but let's ignore that for now.

Everyone is asking whether the 28% rate is low enough for U.S. firms to compete against global rivals. To answer this question we must compare the U.S. rate to those of our major trade partners. The most useful comparison is to other OECD member states. To that end, we've compiled a chart listing the 34 OECD nations and their corresponding corporate rates.


Expect the business community to give the President a nod for his acknowledgement that our current rate is too high ... but don't expect them to be satisfied. Even with this change we'd be far above the average for similarly situated countries.

Finally, it must be noted that this comparative analysis focuses only on statutory tax rates. The effective rates that firms actually pay are much lower due to myriad deductions, credits, exclusions, and timing differences. But that's a topic for another day.

View TaxAnalysts'® Robert Goulder's opinion in its entirety on


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