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RATES MATTER

April 30, 2008

The Tax Policy Blog says that Ireland is looking mighty attractive to UK businesses:

For the second time this month, a major British firm announced that it will reincorporate in Ireland to lower its tax bill. United Business Media (UBM) joined the pharmaceutical company Shire in the exodus of UK firms seeking relief from the country's 28 percent corporate tax rate—which is low compared to the 39.4 percent overall rate in the U.S., but is high by E.U. standards. Ireland's corporate tax rate is currently the lowest in Europe at 12.5 percent.

Connecting the dots:

While these news reports have prompted a heated debate among British lawmakers over how to make their tax system more competitive and attractive to business, they should prompt a similar debate in this country. After all, the U.S. has the second highest overall corporate tax rate among industrialized countries and 11 percentage points higher than Great Britain's rate. See: http://www.taxfoundation.org/news/show/22917.html Moreover, a growing number of U.S. multinational firms are, like UBM and Shire, are generating more profits abroad than domestically. As a result, some may face pressure from shareholders to reduce the exposure of those profits to U.S. tax.

The U.S. has the second highest corporate rate, and Iowa has the highest rate in the U.S. That's why we have to bribe companies to set up shop here.

Tags: iowa tax policy.tax policy.

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