page_title: Political debates about the United States federal budget
section_title: Corporate taxes
hierarchical_section_title: Political debates about the United States federal budget / Debates about tax policy / Can the U.S. outgrow the problem? / Corporate taxes
caption_attribution_description: English: U.S. effective corporate tax rates, 1947–2012
context_page_description: Political debates about the United States federal budget discusses some of the more significant U.S. budgetary debates of the 21st century. These include the causes of debt increases, the impact of tax cuts, specific events such as the United States fiscal cliff, the effectiveness of stimulus, and the impact of the Great Recession, among others. The article explains how to analyze the U.S. budget as well as the competing economic schools of thought that support the budgetary positions of the major parties.
context_section_description: A number of US corporations claim that even the current 35 percent corporate income tax rate causes them to shift several of their operations, including their research and manufacturing facilities, overseas.
  For example, Steven Ballmer, Microsoft's chief executive officer, stated in 2009 that higher taxes "...makes U.S. jobs more expensive. [Microsoft is] better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S." Microsoft reported an overall effective tax rate of 26 percent in its 2008 annual report: "Our effective tax rates are less than the statutory tax rate due to foreign earnings taxed at lower rates" the report said. U.S. tax rules let companies defer paying corporate rates as high as 35 percent on most types of foreign profits as long as that money remains invested overseas. President Obama says he wants to end such incentives to keep foreign profits tax-deferred so that companies would invest them in the U.S.
  In comparing corporate taxes, the Congressional Budget Office found in 2005 that the top statutory tax rate was the third highest among OECD countries behind Japan and Germany. However, the U.S. ranked 27th lowest of 30 OECD countries in its collection of corporate taxes relative to GDP, at 1.8% vs. the average 2.5%.
  U.S. corporate after-tax profits were at record levels during the third quarter of 2012, at an annualized $1.75 trillion. U.S. federal corporate income tax revenues have declined relative to profits, falling from approximately 27% in 2000 to 17% in 2012.
caption: The U.S. federal effective corporate tax rate, 1947-2011
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