A group of corporate CEOs, known as the Reforming America's Taxes Equitably (RATE) Coalition, sent a letter to Congress asking for the corporate tax rate to be lowered. CEOs from 17 of the largest U.S. companies say, in the letter, that the corporate tax rate of 35% is the highest of any industrialized nation and that it leaves American companies unable to compete.
It seems likely that the members of the RATE Coalition read George Orwell's "1984" as an instruction manual, as their call for lowering corporate taxes relies on falsehoods and would disproportionately harm working families.
The claim that corporations pay the highest tax rate in the world is substantially off the mark. While the on-paper corporate tax rate is 35%, most companies pay much less than that. Citizens for Tax Justice (CTJ) found that 280 Fortune 500 companies paid in taxes about half the 35% from 2008 to 2010. During that time, 78 of the companies paid zero or less in taxes in a least one year; 30 of the companies paid an aggregate of zero or less during the entire period. In fact, of the 13 RATE Coalition members in the study, none of them paid a tax rate at or above 35%. The average corporate tax rate the 13 companies actually paid was only 16%.
CTJ continued its study after 2011 taxes were reported and found that most companies continued paying rates similar to the previous three years. 26 of the 30 companies that paid no aggregate taxes from 2008-2010 still paid no taxes in 2011.
For 2011, the overall tax rate for corporations fell to 12.1% of money earned from activities within the U.S., the lowest level since 1972.
Effective corporate tax rates are far from the highest in the world. In 2009, for instance, the effective corporate tax rate in the U.S. was the second lowest, trailing only Iceland.
As for the idea that U.S. corporations are not competitive because of the tax rate, corporate profits are actually at a 60-year high.