American corporations love to complain about the onerous taxes. Well, Price Waterhouse has compiled a ranking of corporate taxation in 183 countries around the world. The United States is nowhere near the top. The average tax burden in the United States, which includes taxes on profit, labor and consumption, amounts to 46.8% of corporate profits. This is about one percentage point below the average for all countries in the survey. American companies pay less of their profits in tax than corporations from nay other countries, including Germany, Australia, Japan, and Mexico.
Businesses argue that lower taxation will lead to more investment and economic development. But Price Waterhouse figures suggest this isn’t always the case. Highly developed countries like Luxembourg and Ireland have low corporate tax burdens, but so do economic basket cases like Malawi. By contrast, Italy – a highly developed industrial economy—has a corporate tax burden roughly as high as that of Mauritania, Benin and the Republic of Congo.
What is confirmed in the data is that very high rates of taxation are associated with fairly dismal poverty. Spare a thought for companies in the Democratic Republic of Congo. The average tax burden there amounts to 339.7% of corporation’s profits.