$17,935,225,650,637. Taking a screenshot of the U.S. Debt Clock, that is the U.S. National Debt. 17, nearly 18, trillion dollars. Most people cannot even comprehend what 17 billion dollars is. There are many reasons to blame but I am going to focus on one in particular, which is the U.S. Corporate income tax rate.
The United States has the highest corporate income tax rate in the world. Currently, the tax rate is at 39.1%. This would not be a problem if there were no other tax rates to compare it to. Before there was technology that allowed any information to be accessed, instantly, at any time, Buy burgerking franchise before high end products could be made for pennies on the dollar in other parts of the world, this might seem like a fair rate. 39.1% is a small bit to pay for making millions and millions of dollars. Unless, of course, you can base your corporation out of Ireland, in which case you only pay 12.5%. This would seem like a no brainer.
Everything is more accessible throughout the entire world thanks to globalization. Ideas and products flow from one country to another in the blink of an eye. Whether you base your corporation out of Ireland or the U.S., you can still sell your products throughout the entire world. It is also worth noting that you can make your products anywhere in the world too. The high manufacturing cost in the U.S. is a big disadvantage but that is a discussion for another time. The high corporate income tax rate really puts U.S. Corporations at a disadvantage. Not only does it put corporations here at a disadvantage, it drives some corporations away and it most certainly does not help attract companies to the United States.
Just take a look at Burger King. When Burger King originally was looking into buying Tim Horton’s (a Canadian company) they were going to move their Headquarters to Canada. Canada happens to have a lower corporate income tax rate than the U.S.
Burger King did not end up moving its headquarters to Canada but if it did, that would be a lot of tax income that would be sorely missed. Although Burger King did not move its headquarters, some corporations have. This loss of tax income does nothing other than increase the U.S. national debt.
If the United States lowered their corporate income tax rates, corporations would not want to move their headquarters to other places. It would even give new corporations a reason to base their companies out of the United States rather than starting up in a different country. The more corporations that decide to keep their headquarters or first base their headquarters in the U.S., the more tax income there would be. The more tax income, the lower the national debt. It is as easy as that.