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> But mostly it's just a smokescreen to ignore how terrible our corporate income tax system is and it's rates are among the highest in the world. I think it ma

> But mostly it's just a smokescreen to ignore how terrible our corporate income tax system is and it's rates are among the highest in the world. I think it makes sense to look at outcomes. It's a fun intellectual exercise to look at the thousands of pages of tax guidance from many tax advisors on lots of different structures within a complex tax system, and analyse the tax rates, which include some high top-end marginal rates. But at the end of the day, tax revenues as a percentage of GDP in the US are 26%. That's well below the EU (world's largest economy, biggest block of developed countries) of 35%, and well below the OECD (world's largest economies) of 34%. It's kind of a myth that the US has some of the world's highest taxes. Perhaps it has some high tax rates, but after all the exemptions and deductions etc, the result is a relatively low tax burden, about 1/3rd lower than the average of other developed countries.

seanmcdirmid 10y ago
Most of those exemptions are relevant, and anyways, the accounting of what constitutes income can be deceiving. I worked in china for 9 years and paid 0% USA taxes because I took a foreign tax credit (I still filled all my income in the 1040). Should that be counted as USA income? Does my 0% drag the average down? Likewise, if that 24% includes foreign income and tax credits, then it is in no way comparable to European numbers that don't include foreign income at all (since no one else taxes global income except a small country in Africa, which isn't a big economy).
- sjy 10y ago
  The grandparent referred to tax revenue as a percentage of GDP, which is a measure designed to compare the tax burden across countries without having to delve into the various ways of measuring income, applying tax credits, and balancing the tax base across income, consumption and capital. You just look at the total tax collected and divide it by GDP. Your employment in China didn't contribute to US tax revenues or (directly) to US GDP, so it is ignored.
  - seanmcdirmid 10y ago
    How do they estimate the domestic GDP contribution of a company to then compute its effective tax rate? Or are they just taking total GDP divided by total tax collected for an overall tax burden? In that case, do these numbers say anything specifically about corporate taxation at all?
    - sjy 10y ago
      They don't; yes; no.
- X-Istence 10y ago
  The US is also one, if not the only country, where citizens working/living abroad are still expected to file US taxes (even if there is a credit). As a green card holder, I too am expected for the lifetime of the green card to pay US taxes, even if I were to move back to my home country and never set foot in the US. This is unheard of anywhere else.

seanmcdirmid 10y ago

Most of those exemptions are relevant, and anyways, the accounting of what constitutes income can be deceiving. I worked in china for 9 years and paid 0% USA taxes because I took a foreign tax credit (I still filled all my income in the 1040). Should that be counted as USA income? Does my 0% drag the average down? Likewise, if that 24% includes foreign income and tax credits, then it is in no way comparable to European numbers that don't include foreign income at all (since no one else taxes global income except a small country in Africa, which isn't a big economy).

sjy 10y ago
The grandparent referred to tax revenue as a percentage of GDP, which is a measure designed to compare the tax burden across countries without having to delve into the various ways of measuring income, applying tax credits, and balancing the tax base across income, consumption and capital. You just look at the total tax collected and divide it by GDP. Your employment in China didn't contribute to US tax revenues or (directly) to US GDP, so it is ignored.
- seanmcdirmid 10y ago
  How do they estimate the domestic GDP contribution of a company to then compute its effective tax rate? Or are they just taking total GDP divided by total tax collected for an overall tax burden? In that case, do these numbers say anything specifically about corporate taxation at all?
  - sjy 10y ago
    They don't; yes; no.
X-Istence 10y ago
The US is also one, if not the only country, where citizens working/living abroad are still expected to file US taxes (even if there is a credit). As a green card holder, I too am expected for the lifetime of the green card to pay US taxes, even if I were to move back to my home country and never set foot in the US. This is unheard of anywhere else.