U.S. corporations have been vilified by the Left --- from unions to Democrats who shout populist rhetoric at how unfair our economic system is. Yet the United States has one of the hightest corporate tax rates in the world. You also hear how corporations export jobs overseas and don't pay taxes on foreign earnings. That is not the case, says The Tax Foundation.
Consider this observation from the Tax Foundation, a non-partisan group formed in 1937. "The U.S. has a complicated "worldwide" system of taxation that requires American businesses to pay the 35 percent federal corporate tax rate on their income no matter where it is earned—domestically or abroad. When it comes to foreign profits, companies do pay income taxes—not once, but twice."
The Tax Foundation summerizes its research thusly: "Amid widespread accusations of major U.S. corporations not paying taxes on international profits, IRS data shows that American companies paid nearly $100 billion in corporate income taxes to foreign governments in 2007, the most recent year for which the data is available.
"The truth is U.S. companies pay plenty of income taxes on international profits—they pay them to the host countries where that income is earned and where the benefits of those taxes are received." said Tax Foundation President Scott A. Hodge, author of a new Tax Foundation Fiscal Fact on the topic. "Washington simply wants another bite at the apple with our worldwide tax system."
Read the new study. More on business taxes.