What ? Paul Ryan is a lying son-of-a-bitch?

First Representative Ryan (R-WI) accuses Obama of prosecuting a class war when focusing on tax loopholes:

“We want to make the tax code more fair, more competitive, simpler — and lower tax rates on families, businesses and entrepreneurs so they can compete and create private sector jobs,” Ryan said yesterday in a phone interview. “The difference is, the president likes to invoke tax loopholes as part of his class warfare mantra usually to try to invoke fear, envy and anxiety as a motivator not as a means to lower tax rates to grow the economy.”

Ryan continues by claiming that:

If you lower tax rates across the board, we always see stronger economic growth result across the board. But more to the point, in the 21st century, we are now in a global tax competition. Capital is so much more mobile than it ever used to be and when we tax our employers, our manufacturers, our exporters, our job creators at rates that are much higher than our foreign competitors tax theirs, that’s when we lose. At this time, our tax rates are among the highest in the industrialized world and that’s putting us at a huge competitive disadvantage. We need to get our tax rates down so we can be more competitive.” [emphasis added]

David Callahan of Policy Shop tartly replies with:

Let’s be clear here: Corprate [sic] tax burdens are not higher in the U.S. than in the rest of the industrialized world. In fact, the opposite is true.

While the official U.S. top corporate income tax bracket is higher than most countries, it is well known that few companies actually pay that rate — and, indeed, many pay nothing at all. The General Accounting Office reported in 2008 that two out of every three United States corporations paid no federal income taxes during a given year from 1998 through 2005.

Paul Ryan is well aware that the corporate income tax code is littered with loopholes. As he said in the same interview: “You have protected industries, businesses that have been singled out for favors in the tax code.”

Yet he doesn’t acknowledge how these loopholes make it absurd and misleading to compare official tax rates across countries. The more accurate comparison is the corporate tax burden as a percentage of GDP. And if you look at these numbers, using the OECD’s data tables, you find that the U.S. burden is lower than many other countries.

In 2008, the average corporate tax burden in OECD countries was 3.5 percent. Japan clocked in at 3.9 percent; Canada at 3.3 percent; the U.K. at 3.6 percent; Australia at 5.9 percent; France at 3.5 percent; Germany at 1.9 percent; and the United States just below Germany at 1.8 percent. Only one country had as low of a corporate tax burden as the U.S. in 2008 and that was Turkey. (The tables allow you to analyze different years if you don’t like 2008.)

In other words, the statutory tax rate very rarely equals the effective tax rate. To assess the tax burden a person or entity must pay, one must identify the effective tax rate. The effective tax rate for corporations is not at all high when compared to other countries. In fact, it is low.

Paul Ryan — Fib teller.

Related articles

• Tax Foundation: U.S. Corporate Effective Tax Rate Is Among Highest in World (taxprof.typepad.com)
• A couple of nice Mankiw links (ourdinnertable.wordpress.com)
• Tax Foundation: (taxprof.typepad.com)
• Bachmann Open to a ‘0% Corporate Tax Rate’ (crooksandliars.com)
• Warren Buffett: Tax Me More! (outsidethebeltway.com)
• Warren Buffett’s Fiscal Innumeracy – Forbes (news.google.com)
• Warren Buffett’s Berkshire Hathaway Owes Taxes Going Back To 2002 (huffingtonpost.com)