United States Will Soon Have Highest Corporate Tax Rate On The Planet
Losing Competitiveness-
Twenty years ago, the United States had one of the lower corporate tax rates in the developed world. Of the 23 OECD countries in 1990, America's tax burden was 16th.
Over the course of the past two decades, not only have emerging economies-- typically with low tax rates-- rapidly joined the industrialized world, but existing advanced economies have slashed their tax rates to become more competitive.
In the meantime, the U.S. has actually raised corporate taxes over the past two decades:
Since 1990, of the 23 OECD members that had a corporate income tax at that time, 22 have reduced their rate. On average, the rate reduction was about 14 percentage points. The United States was the only country to increase its federal rate, from 34 percent to 35 percent in 1993.
Meanwhile, over the course of a similar time period, America greatly expanded the number of college graduates and spent enormous sums on public and higher education, without the commensurate results to show for it:
In 1992 the BLS reports that total college graduate employment was 28.9 million, of whom 5.1 million were in occupations which the BLS classified as “noncollege level jobs” while in 2008 the BLS data indicate that total college graduate employment was 49.35 million, with 17.4 million in occupations classified as requiring less than a bachelor’s degree.
An example or two from specific occupations is useful. In 1992 119,000 waiters and waitresses were college degree holders. By 2008, this number had more than doubled to 318,000. While the total number of waiters and waitresses grew by about 1 million during this period, 20% of all new jobs in this occupation were filled by college graduates. Take cashiers as well. While 132,000 cashiers possessed college degrees in 1992, by 2008, 365,000 cashiers were college graduates. As with waiters and waitresses, 20% of new cashiers since 1992 are college graduates.
In other words, in 1992, about the time America was declaring victory in the Cold War, 17.6% of college grads worked jobs that were "below them." In 2008, 35.3% of college grads (roughly double) worked those kinds of menial jobs. Education may indeed be part of America's problem, but not in the way it is often described-- "too little opportunity stifling the hopes and dreams of many." Instead, the numbers loudly and clearly that America is simply devoting its ample education resources toward inefficient ends. For those who consistently clamor that our schools and colleges are underfunded, you're just wrong. They're improperly funded, certainly. But not underfunded. And there's not too little opportunity or too much of it. But we are subsidizing the wrong kind, wasting an inordinate amount of resources along the way.
The 20th Century was America's Century, and many believe the 21st Century will be China's Century. Or Asia's, more generally.
Only if we resign ourselves to that fate.
It's not hopeless, and we should stop acting like it's hopeless. The 21st Century can still be America's Century, if we reform our economy and stop moving toward becoming precisely the socialist system we fought against throughout the better part of the 20th Century.
We can't take for granted that America is number one, and think we can do whatever we want with our tax policy and skate by on our good name. We should stop thinking "more" education is the answer, and if we throw enough money at it, we'll be just fine. We should also stop being so defeatist and protectionist about outsourcing and offshoring of jobs-- as if it's inevitable and we should just give up. The 2006 and 2008 elections set our country back easily a decade or more, but 2010 and hopefully 2012 right the ship and set our country back on a path of fiscal sanity, economic certainty, and America can yet again become the world's most robust engine of commerce.
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