And we were giving these Bozos big tax breaks too.

Some say the top US federal income tax rate of 35% is too high and makes U.S. companies uncompetitive in the world market. In fact, because of abundant exceptions, credits, deductions, accelerated depreciation and amortization, lawful and unlawful income shifting, and tax havens and shelters, the effective rate paid by corporations in the US (13.4%) was below the average (16.1%) for the 19 OECD nations in 2000-05.

As a result of these and other characteristics of the corporate income tax, the U.S. is generally considered a tax haven for corporations, and not a jurisdiction to be escaped to other more corporate-tax-friendly ones, especially in the case of some industries, such as the financial services sector.

--according to Linda Beale (emphasis added), who goes on to explain that—

[T]ax breaks lead to very low tax rates on certain types of investments — even negative rates in some cases. For example, a 2005 Congressional Budget Office study found that the effective marginal corporate rate — the rate paid on the last dollar of income earned and arguably the tax rate most relevant for investment decisions — on debt-financed investment in machinery was negative, estimated at -46 percent. This means that the total value of the deductions that companies may claim for such investment is much larger than the tax they pay. (Put another way, it means that other taxpayers effectively subsidize the investment.)

As others have pointed out, it isn't the US-based multinational companies that are disadvantaged by our tax code. It's the ordinary Main Street, plain vanilla, cash cow, purely US companies that are most likely to pay the highest tax rates. Guess which group has better relationships with the House Ways and Means and Senate Finance committees.

Update on Friday, November 14, 2008 at 03:05PM by Skeptic

Matt Yglegias has this post with the following chart showing corporate tax revenues as a percent of GDP. The US is certainly no outlier.