Hyden, Miron & Foster, PLLC Law Blog

Tuesday, August 22, 2017

Do Americans Pay the Most in Corporate Taxes?

How can I reduce my corporate taxes?

The corporate tax rate is being discussed at length among politicians and the nation.  President Trump has declared that America has the highest corporate tax rate in the world.  His goal is to lower the corporate tax rate to assist businesses in the U.S.  Others questions whether businesses in fact pay a high tax rate as the laws stand now.  Our Little Rock, Arkansas tax law attorneys at Hyden, Miron & Foster, PLLC, discuss the corporate tax rate, potential reforms, and how you can reduce your tax exposure.

America’s Current Corporate Tax Rate

The United States does have the highest statutory corporate tax rate. The corporate tax rate in the U.S., when federal, state, and local taxes are included, approaches 39 percent in several areas.  This is well above the other highly developed nations represented in the OECD or Organization for Economic Cooperation and Development.  

President Trump has stated that he would like to lower the corporate tax rate to 15 percent.  House Speaker Paul Ryan has indicated that 20-25 percent is a realistic goal.  Either way, the reduction would significantly impact the statutory tax rate in the U.S. and bring it in line with many other developed nations.  

Using Deductions and Credits to Lower Your Taxes

While the U.S. does have the highest statutory tax rates, our plethora of deductions and credits can significantly lower an individual business’ tax liabilities.  When deductions and credits are factored into the comparison with other nations, America’s corporate tax rate arguably drops considerably.  Small businesses across America can take certain steps to limit their tax exposure including:

Taking the right deductions:  Consult with a tax professional to find out what deductions your business may be eligible for.  Use a system to track your income and expenses so that you can easily take the right deductions.  Have procedures in place for keeping and filing your receipts, as you may not be able to take certain deductions without these records.

Keep abreast of law changes:  Tax laws are constantly changing and knowledge of new tax measures could save your business money.  Your tax attorney will be in the best position to monitor law changes that impact your business.  Take time today to sit down with a licensed tax attorney for assistance with reducing your corporate tax rate.

 


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