Comparing national corporate tax rates


Last week came news that GE has avoided having to pay any — ANY — corporate income tax in the United States. As reported in the New York Times, that feat, despite earning $14.2 billion in worldwide profits ($5.1 billion in the U.S.), is due to "innovative accounting" and "fierce lobbying," as well as a large stable of former government officials from the IRS and tax-writing Congressional committees. The article goes on to state that the U.S. has one of the highest corporate income tax rates in the world. But that statement is somewhat misleading, as you'll see below: like General Electric, the effective tax rate of U.S. companies–what they actually pay–is a lot lower than the statutory tax rate–the percentage of corporate income Congress says they should pay.

The Guardian Newspaper recently released data on combined corporate tax rates from 30 western countries since 1981. Here at Sunlight, we decided to take that data and map it over time so you could see how tax rates have changed (mostly they've gone down) and which countries have the highest and lowest rates, providing some context to the Times' assertion above. In the map below, click the play button to animate the combined corporate tax rates over the last 30 years. The darker the color, the higher the rates. Then scroll below to see effective U.S. corporate tax rates charted out over time.

Although the U.S. tax rate is indeed higher than other western nations, it's effective corporate tax rate has steadily dropped over the past four decades, from near 50 percent to the upper 20s, data from the Economic Report of the President shows. General Electric isn't the only company lowering its tax bill.