Warren Buffett: ‘It Is A Myth’ That U.S. Corporate Taxes Are High

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2012 GOP presidential hopeful Rick Santorum took to the pages of the Wall Street Journal today to lay out his economic plan, reiterating his desire to cut the corporate tax rate in order to "restore America's competitiveness." During an interview on CNBC, billionaire investor Warren Buffett, in response to Santorum's piece, noted that is is actually "a myth" that America's corporate taxes are high. "Corporate taxes are not strangling American competitiveness," Buffett explained, even bringing a chart to prove his point:

The interesting thing about the corporate rate is that corporate profits, as a percentage of GDP last year were the highest or just about the highest in the last 50 years. They were ten and a fraction percent of GDP. That's higher than we've seen in 50 years. The corporate taxes as a percentage of GDP were 1.2 percent, $180 billion. That's just about the lowest we've seen.

So our corporate tax rate last year, effectively, in terms of taxes paid for the United States, was around 12 percent, which is well below those existing in most of the industrialized countries around the world. So it is a myth that American corporations are paying 35 percent or anything like it

…

Corporate taxes are not strangling American competitiveness.

Buffett is absolutely right to note that while corporate profits are at a record high, corporate taxes are at a nearly half-century low. When looking at the rate that corporations actually pay (as opposed to the statutory rate that only exists on paper), the U.S. has

the second-lowest corporate tax rate

in the developed world, and

raises far less than other nations

in corporate tax revenue.

During the interview, Buffett also responded to Gov. Chris Christie's pronouncement that Buffett should just "

write a check and shut up

," instead of calling for higher taxes on the rich. "

It's sort of a touching response

to a $1.2 trillion deficit isn't it? That somehow the American people will just all send in checks and that'll take care of it," Buffett said.

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Yet more progressive BS....

The World Bank published a report last November [2010] containing the effective corporate tax rates of 183 nations. The U.S. had an effective corporate tax rate of 27.6 percent, according to the study, which is still pretty high. Among larger international economies, only Japan, New Zealand and Thailand had higher effective tax rates on corporate profits.

http://www.politifact.com/virginia/statements/2011/jun/18/george-allen/george-allen-says-us-corporate-tax-rate-second-hig/

Another analysis that calls into question Buffet's (clearly partisan) claims:

http://www.aei.org/article/economics/fiscal-policy/taxes/report-card-on-effective-corporate-tax-rates/

Yet another:

PricewaterhouseCoopers, which did the study for the Business Roundtable, found that companies headquartered in the United States paid an average effective rate of 27.7 percent between 2006 and 2009 — higher than those in all but five of the nearly 60 other countries included in the survey.

http://thehill.com/blogs/on-the-money/domestic-taxes/156067-study-us-corporations-face-comparatively-high-taxes

And another:

http://assets.opencrs.com/rpts/R41743_20110331.pdf

Edited February 27, 2012 by xebec

[SMOKE 1,426]

Warren: write a check or stfu.

[Ban Hammer 13,349]

Warren: write a check or stfu.