Tax Foundation, Illinois Corporate Tax Hike Inches U.S. Closer to #1 Ranking Globally:
The recent move by Illinois lawmakers to increase the state’s corporate tax rate from 7.3% to 9.5% is further evidence that no tax change is made in a vacuum. Not only did the rate hike move Illinois from having the 21st highest overall corporate tax rate among the 50 states to having the 3rd highest, it also raised the average corporate tax rate for the nation as a whole, thus inching the U.S. closer to Japan as having the highest corporate tax rate among the leading industrialized nations.
When state lawmakers think about how their state compares, they tend to think only about their standing relative to their direct neighbors or the other 49 states. However, they need to also recognize that they are competing in a global economy and that their state corporate taxes are being levied in addition to the federal corporate tax rate of 35%. Because the U.S. federal rate is the highest federally imposed corporate tax rate among the 31 nations comprising the Organization for Economic Cooperation and Development (OECD), most states are effectively imposing some of the highest corporate tax rates in the world.
|
Comparing U.S. State Corporate Taxes to the OECD (2011) |
||||
|
OECD Rank |
Country/State |
Fed. Rate 2010 |
Top State/Provincial Corporate Tax Rate |
Combined Fed. & State Rate |
|
|
Pennsylvania |
35 |
9.99 |
41.5 |
|
|
Minnesota |
35 |
9.8 |
41.4 |
|
|
Illinois |
35 |
9.5 |
41.2 |
|
|
Alaska |
35 |
9.4 |
41.1 |
|
|
New Jersey |
35 |
9.36 |
41.1 |
|
|
Rhode Island |
35 |
9 |
40.9 |
|
|
Maine |
35 |
8.93 |
40.8 |
|
|
California |
35 |
8.84 |
40.7 |
|
|
Delaware |
35 |
8.7 |
40.7 |
|
|
West Virginia |
35 |
8.7 |
40.7 |
|
|
Massachusetts |
35 |
8.5 |
40.5 |
|
|
Indiana |
35 |
8.5 |
40.5 |
|
|
New Hampshire |
35 |
8.5 |
40.5 |
|
|
Vermont |
35 |
8.5 |
40.5 |
|
|
Maryland |
35 |
8.25 |
40.4 |
|
|
Oregon |
35 |
7.9 |
40.1 |
|
|
Wisconsin |
35 |
7.9 |
40.1 |
|
|
Nebraska |
35 |
7.81 |
40.1 |
|
|
Idaho |
35 |
7.6 |
39.9 |
|
|
New Mexico |
35 |
7.6 |
39.9 |
|
|
Connecticut |
35 |
7.5 |
39.9 |
|
|
New York |
35 |
7.1 |
39.6 |
|
|
Kansas |
35 |
7.05 |
39.6 |
|
1 (2) |
Japan (2010 Rates) |
30 |
11.51 |
39.54 |
|
|
Arizona |
35 |
6.97 |
39.5 |
|
|
North Carolina |
35 |
6.9 |
39.5 |
|
|
Montana |
35 |
6.75 |
39.4 |
|
2 (1) |
United States |
35 |
6.56 |
39.3 |
|
|
Alabama |
35 |
6.5 |
39.2 |
|
|
Arkansas |
35 |
6.5 |
39.2 |
|
|
Tennessee |
35 |
6.5 |
39.2 |
|
|
Hawaii |
35 |
6.4 |
39.2 |
|
|
North Dakota |
35 |
6.4 |
39.2 |
|
|
Missouri |
35 |
6.25 |
39.1 |
|
|
Georgia |
35 |
6 |
38.9 |
|
|
Kentucky |
35 |
6 |
38.9 |
|
|
Oklahoma |
35 |
6 |
38.9 |
|
|
Virginia |
35 |
6 |
38.9 |
|
|
Iowa |
35 |
12 |
38.6 |
|
|
Florida |
35 |
5.5 |
38.6 |
|
|
Mississippi |
35 |
5 |
38.3 |
|
|
South Carolina |
35 |
5 |
38.3 |
|
|
Utah |
35 |
5 |
38.3 |
|
|
Michigan |
35 |
4.95 |
38.2 |
|
|
Colorado |
35 |
4.63 |
38.0 |
|
|
Louisiana |
35 |
8 |
37.4 |
|
|
*Texas |
35 |
0 |
35.0 |
|
|
*Washington |
35 |
0 |
35.0 |
|
|
*Ohio |
35 |
0 |
35.0 |
|
|
Nevada |
35 |
0 |
35.0 |
|
|
South Dakota |
35 |
0 |
35.0 |
|
|
Wyoming |
35 |
0 |
35.0 |
|
2 |
Japan (2011 Rates) |
30 |
11.51 |
34.54 |
|
3 |
France |
34.43 |
|
34.4 |
|
4 |
Belgium |
33.99 |
|
33.99 |
|
5 |
Germany |
15.83 |
14.4 |
30.18 |
|
6 |
New Zealand |
30 |
|
30 |
|
7 |
Spain |
30 |
|
30 |
|
8 |
Australia |
30 |
|
30 |
|
9 |
Mexico |
30 |
|
30 |
|
10 |
Luxembourg |
21.84 |
6.75 |
28.59 |
|
11 |
Canada |
16.5 |
11.5 |
28 |
|
12 |
United Kingdom |
28 |
|
28 |
|
13 |
Norway |
28 |
|
28 |
|
14 |
Italy |
27.5 |
|
27.5 |
|
15 |
Portugal |
25 |
1.5 |
26.5 |
|
16 |
Sweden |
26.3 |
|
26.3 |
|
17 |
Finland |
26 |
|
26 |
|
18 |
Netherlands |
25.5 |
|
25.5 |
|
19 |
Austria |
25 |
|
25 |
|
20 |
Denmark |
25 |
|
25 |
|
21 |
Korea |
22 |
2.2 |
24.2 |
|
22 |
Greece |
24 |
|
24 |
|
23 |
Switzerland |
8.50 |
14.47 |
21.17 |
|
24 |
Turkey |
20 |
|
20 |
|
25 |
Czech Republic |
19 |
|
19 |
|
26 |
Hungary |
19 |
|
19 |
|
27 |
Poland |
19 |
|
19 |
|
28 |
Slovak Republic |
19 |
|
19 |
|
29 |
Chile |
17 |
|
17 |
|
30 |
Iceland |
15 |
|
15 |
|
31 |
Ireland |
12.5 |
|
12.5 |
