SANTA MONICA, Calif., Dec. 13, 2012 /PRNewswire-USNewswire/ -- The ongoing fiscal cliff negotiations between President Obama and Speaker Boehner have included the idea of lowering the corporate tax rate. Since 1909, when the federal corporate tax was first introduced and the uniform rate was 1% for all business income above $5,000, until today, when the top bracket has businesses with over $18.3 million in income paying 35%, Americans have debated whether or not lowering the rate results in job creation.
Would lowering one of the world's highest statutory tax rates help drive unemployment below its current 7.7% rate? Or with $1.5 trillion in cash reserves among the S&P 500 already sitting on the sidelines, does lowering the rate make companies more profitable but no less likely to hire workers?
ProCon.org, a nonpartisan research organization devoted to critical thinking on controversial issues, debuts a brand new issue website, http://corporatetax.procon.org, and delves into the pros and cons of whether or not lowering the corporate income tax rate yields more jobs.
Proponents of lowering the corporate tax rate to create jobs argue that it incentivizes job creation in the United States instead of overseas, encourages increased investment in research and infrastructure, and passes savings on to consumers through lower prices. They say that the United States already has the highest corporate income tax rates in the world, which creates a competitive disadvantage for US businesses.
Opponents of lowering the corporate tax rate to create jobs argue that it results in more profits for corporations without affecting job creation, and that unemployment rates were the lowest in recorded US history during the time when corporate income tax rates were highest. They say that lowering the rate would increase the US deficit, and that companies hire employees based on need, not because of corporate tax rates.
In addition to in-depth research on the pros and cons of lowering the tax rate to stimulate job growth, the new ProCon.org website contains a historical background section, videos, images, over 50 footnotes and sources, and Did You Know? facts including:
- Of the 500 large cap companies (a market capitalization value of more than $10 billion) in the Standard & Poor (S&P) stock index, 115 paid a federal corporate tax rate of less than 20% from 2006-2011, and 39 of those companies paid a rate of less than 10%.
- At 35%, the United States reportedly has the highest federal corporate income tax rate in the world, and it has a higher effective corporate tax rate (27.6%) than 164 out of 183 other countries.
- The federal government has collected a corporate income tax since 1909, when the rate was 1% for all business income above $5,000.
- The corporate income tax rate reached 52.8% from 1968-1969, the highest in US history. The unemployment rate during these years was 3.6% and 3.5% respectively.
- From 1940 to 1942, Congress passed four separate Revenue Acts which raised the top marginal corporate income tax rate from 19% to 40%.
For pros, cons, and related research on whether or not lowering the corporate tax rate yields job growth, visit http://corporatetax.procon.org.
ProCon.org (online at www.procon.org) is a 501(c)(3) nonprofit public charity whose mission is promoting critical thinking, education, and informed citizenship. Information is presented on 45 different ProCon.org issue websites in subjects ranging from Obamacare, alternative energy, and medical marijuana to the death penalty, illegal immigration, and gay marriage.
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