| The US and Canada have been grouped in with | | | | Ireland at 14%. This is a reflection of the |
| the Republic of Congo, China, Brazil and Germany | | | | countrys' low corporate income tax rates. |
| in a new study by the CD Howe Institute. The | | | | Belgium was found to have the lowest effective |
| report by the Canadian conservative think tank | | | | tax rate on capital among all 81 countries at |
| shows that the US has some of the highest | | | | -4.4%. This is a result from the introduction of a |
| effective tax rates on capital among 81 | | | | national deduction for equity financing. Belgian |
| developed and developing countries. | | | | companies are able to claim a higher tax value of |
| The 2006 Tax Competitiveness Report looked at | | | | deductions compared to the tax levied on income |
| 81 countries and scores them according to their | | | | earned from investments, said the study. |
| tax treatment of business investment. The study | | | | "The US certainly looks like a high-tax country |
| concluded that highly taxed Canada ranks a | | | | when it comes to business taxation," said the |
| disappointing 8th place. | | | | authors of the study, Chen and Mintz. They |
| The "investment-hostile" Republic of Congo ranked | | | | agreed with the conclusions of the Presidential tax |
| first, according to the study. The US ranked | | | | reform panel that the US corporate tax system |
| among the most heavily burdened, with an | | | | is "a major barrier to investment and growth, |
| effective tax rate on capital of 38%, above both | | | | degrading other strengths of the US economy." |
| Canada and Mexico at 36.6% and 13.8%, | | | | "Instead of using the tax system to interfere |
| respectively. | | | | with economically sound business decisions, it |
| The study found that China has the second | | | | would be much better to have a broadbased |
| highest effective tax rate at 47%, driven by a | | | | neutral corporate income tax with low rates to |
| non-refundable 17% value-added tax applied to | | | | create a better business environment," the study |
| the purchase of machinery. | | | | continued. "Simplification would make it easier for |
| Argentina, Brazil and Germany complete the top | | | | taxpayers to comply with the system and for |
| five list of tax-burden "bad boys." | | | | the IRS to administer the tax system." |
| The most tax-favored jurisdictions include Hong | | | | "The savings in compliance and administrative |
| Kong with a tax of 6.1%, Singapore at 11.5% and | | | | costs would be good for the US economy as well. |