Rick Kelo is an Authoritative Economic
Voice, Who Helps Others Understand How Ideas Have Shaped Our Modern World
Nothing quite sparks heated debate in the US
as does the subject of taxes and what we should and shouldn't be paying. On the
one hand, many see taxes as an important part of civilized society- providing
the government with the money to spend on things we can all benefit on-
schools, roads, hospitals and other aspects of infrastructure. For others,
taxes are the government greedily deciding how our hard earned money should be
spent, and taking the power into their own hands. In many ways it also explains
the partisan political divide in the US, as many of these ideas fall on either
side of the Republican/Democrat fault line.
Rick Kelo is a head tax adviser, and also
prolific economic thinker. He is a member of the academic question and answers
forum Quora.com, where he helps answer users questions about economics and
explain them in context of the real world. A recent question posed was as to
Why the US has the Highest Rate of Business Taxes in the World. IN a short and
informative response, Rick Kelo answered as follows.
''Firstly
there are Marginal Tax Rates, or the maximum amount on paper that a corporation
may pay before deductions. Secondly comes the Effective Tax Rate (called ETR in
taxation). This is the amount that a firm actually does pay after deductions.
The other point I’d clarify is you say “Businesses.” Really in an American
context we’re talking about C Corps, and in the context of the answer I am
about to give you it is publicly traded C Corps. It is impossible to verify or
truly know the tax rate of private companies. America's Effective Tax Rate,
that our large corporations actually pay, is the second highest in the world.
Our multinationals (MNCs) pay an average ETR of 30%. Only Japan is higher at
37%.''
