America used to have one of the lowest corporate tax rates in the world but, as other industrialized nations have lowered corporate taxes, in 2011 the U.S. combined corporate rate of 39.2% was the second highest among OECD (Organization for Economic Cooperation and Development) countries, 13 percentage points higher than the OECD average.  With the scheduled reduction in Japan’s corporate tax rate taking effect on April 1, 2012, the combined statutory rate in the United States will now be the highest among the OECD countries.

Also unlike most other countries, the United States taxes the worldwide earnings of U.S.-headquartered companies, not just their U.S. earnings.  To level the playing field, Congress has enacted a series of complex tax rules designed to allow American companies to compete better with their foreign competitors.

The Treasury Department now proposes to fundamentally rewrite the basic rules of international taxation that have been in existence for nearly 100 years in a manner that would severely disadvantage U.S. companies.  While most of the world is striving to make their companies more competitive, the United States is moving in the opposite direction.