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Corporate Taxes

Do we have the second highest corporate tax rate in the world?

Do we have the second lowest corporate tax rate in the world?

Which is true?

The liberals say it's the second lowest at about 6%. The conservatives say it's the second highest at 35%. Both are TRUE! But why?

The official IRS corporate tax rate is 35%. But just like the individual tax rates, corporations get tax breaks and deductions which reduce their effective rate to somewhere between 0% and 35% depending on the corporation. Congress has provided these tax breaks and deductions to encourage investment.

So if the true effective rate is 6%, then why do the liberals object to reducing the official tax rate to 6%? Congress could then remove all the tax breaks and corporations could reduce their costs by not having to spend lots of money looking for tax loopholes and tax breaks. Lobbyists looking for special tax breaks would disappear. Incidentally, lobbyists are another complaint by the liberals. It seems they would want to get ride of them.

We would then have the real second lowest tax rate in the world.

But what the liberals want to do and will do when they control Congress is to remove all the tax breaks and deductions for corporations. This will move the effective rate back to the real 35% tax rate. Then we will be back to having the second highest corporate tax rate in the world. This will put American corporations and businesses at a deeper competitive disadvantage.

So in truth they want to increase corporate taxes. Just listen to them.

Just who pays those corporate taxes? Liberals say the business. Conservatives say the consumer. Taxes are a part of doing business (cost) and the business includes these as part of cost when calculation their product sales price. Profits are then calculated based on the total costs. Thus the taxes are passed on to the consumer who purchases their products. Business taxes are just an indirect way of collecting consumption tax from the consumer but it is still a consumption tax. It's just hidden and is not transparent. We propose elimination of all income taxes, including corporate taxes, and move our nation to a open transparent consumption tax.


As an example, suppose an investor invests $10.00 in a business with the expectation that in a year they will get a 6.5% return of $0.65. Let's illustrate this as putting a jar on the table with the business sales paid into the jar. During the year, a consumer came by and put $10.00 in the jar. Assume the business makes a 10% profit of $1.00 after business costs. At the end of the year out the profits of $1.00, $0.35 is taken and given to the government for taxes (35% tax rate). The remaining $0.65 goes to the investor who is happy because he got what he expected, a 6.5% return.

Now, who paid the $0.35 in taxes to the government?
  • The Investor
  • The Business (jar)
  • The Consumer

Hint: Who lost the $0.35?


The Investor was never the owner of the $0.35 and never expected to be the owner. The business never owned the $0.35 but was just holding it for the government. On the other hand, the consumer owned the $0.35 and chose to give it up to the government by buying the businesses' products.

Our solution is to remove all Income Taxes with an amendment to repeal the 16th Amendment. Then we will have the lowest real and effective corporate tax rate in the world. This is how you attract businesses to America.