Firms push for U.S. corporation tax reform

Is investment less attractive in the United States due to the high rate of corporation tax?

A number of companies believe so. In the U.K., firms including Starbucks and Amazon have been placed under scrutiny for avoiding the U.K. rate of 24 percent -- in 2012 -- although this is due to be reduced to 21 percent in 2014. By using off-shore islands as the main registration for companies, they can operate in the U.K. without landing themselves a hefty tax bill.

See also: Are U.S. visa practices risking company innovation?

However, in the United States, corporation tax rates are also in the media. The top rate is currently 35 percent, which is cause for complaint according to a letter sent to Congressional leaders this week.

19 firms have signed the document, which argues for a reduction in this business tax. Using the example of Japan, which lowered its corporation tax rate last year -- leaving the U.S. bearing the torch for the highest rate in the industrial world -- the companies argue that American business is now "less competitive and makes the U.S. a less attractive place for investment, ultimately harming businesses, investors, workers and consumers."

Companies including AT&T, FedEx, Boeing and Gap have signed the request, and asked that a "significant" reduction in corporation tax becomes a top priority for the Obama Administration.

Via: Huffington Post

Image credit: Flickr

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This post was originally published on Smartplanet.com