It is well known that the U.S. statutory tax rate is the highest of any developed nation at 39.1 percent, but it is sometimes questioned whether or not American companies actually face a high effective tax rate (after deductions).
The answer is YES, American companies pay, on average, one of the highest rates in the world in this category too.
- A World Bank study of corporate income taxes in 185 countries for 2013 finds that cash tax payments are higher for companies operating in the United States as a percentage of income than the average of other OECD and non-OECD countries.
- The U.S. cash effective tax rate (ETR) of 27.6 percent is more than 12 percentage points higher than the average of other OECD countries and 11 percentage points higher than the average of non-OECD countries.
- The U.S. cash effective tax rate is the highest in the G-7 and the second highest in the OECD after New Zealand.
U.S. policies that improve U.S. competitiveness and enhance the ability of U.S. companies to compete in the global marketplace are vital for long-term U.S. economic growth.