Making the United States Less Competitive
by JenniferPellet
2011 marks the 20th year in which the U.S. statutory tax rate has been above the simple average of non-U.S. countries in the Organization for Economic Cooperation and Development (OECD).With a combined federaland state corporate tax rate of 39.2 percent, the U.S. has the second-highest overall rate among OECD nations. Only Japan, with a combined rate of 39.5 is higher. But this will soonchange. Japan is planning to reduce its national rate by 4.5 percentage points, which will bring its overall rate to below 35 percent.
As of January, Canada had already reduced its tax rate from 18 to 16.5 percent. the U.K. rate willfall from 28 percent to 27 percent as a first step of a multi-year plan to lower the British rate to 24 percent by 2014. America’s biggest economic competitor, China, lowered its corporate tax rate from 33.3 percent to 25 percent in 2008.
Critics argue that due to exemptions and allowances the effective rate for U.S. companies islower. For manufacturers and others with historical assets to depreciate that may be true, but for younger companies whose assets are mostly intellectual property thatisn’t the case, according to Tax Foundation president Scott Hodge. Companies like P&G and Dow Chemical may pay at lower effective rates, but for companies like Apple, Netflix or Google—the ones more likely toexpand or boost their employment—statutory rates matter.
To attract business and investment in a fiercely competitive global marketplace, every industrialized country except the United States has lowered its corporate income tax over the past 20 years. The United States has bucked that trend and increased its rate, creating a less-hospitable environment for corporations.
Other Related Content
M&A Takeaways
While many expected the global recession to be a challenging time for deal-making, a recent study by KPMG reports the reverse.
Building Back America
Once upon a time, America’s businessmen and entrepreneurs were social and political leaders. Too often now we leave those leadership duties to others who, frankly, don’t know what it takesto run a business or create wealth. But we have an opportunity to reclaim them and take a stand for what is best forour nation.
Are You Ready to Take on China’s Next-Generation Competitors?
The broad middle markets of China, India, and Brazil are where most of the growth of the next decade will be found. It will be hard forany firm to be among the global market leaders in 2020 unless they have a meaningful share of this. The troubleis, the next-generation companies in China such as Haier, Geely, and others that are stepping onto the global stage as tough competitors are already positioning themselves to dominate these markets.
66 Percent of CEOs Plan to Freeze or Downsize Workforce Size
The beginning of Augustbrought Washington’s debt ceiling circus followed shortly by S&P’sdowngrade of American debt. And, in turn, CEO confidence in business conditions remained negative. Though the CEO Confidence Index rose slightly (0.4 percent) it remained at adismal 5.30 out of a possible 10. As one CEO put it, “As I approach my 44th year in business, the last 20 as a CEO, I can never remember a time when I felt so disenfranchised from our leadership in Washington.
Globalization & Technology: Embrace Tomorrow's Strategies
Globalization and technology have drastically changed the business landscape. As a business leader you haveno control over geopolitical conflicts, but they will undoubtedly affect you. Here are some strategiesfor facing the future.
Previous Article in GlobalBusiness Next Article in Global Business
Jennifer Pellet
As editor-at-large at Chief Executive Magazine, Jennifer Pelletwrites feature stories and CEO roundtable coverage and also edits various sections of the publication.

Building Back America
September 9 2011 by Gary Shapiro
Signs point to an American economic decline. GDP growth has slowed. Our debt now exceeds our GDP. Our bond ratings are wavering. Congress shows no signs it is willing to cut spending and, given that half our citizens get government checks, most Americans resist cuts to entitlements. Our anemicrecovery has created few jobs. Regulations, mandated benefits and uncertainty over the future have made hiring—at least hiring Americans to work in America—an unattractive proposition.Many businesses are hoarding cash or investing it in faster-growth economies.
President Obama is not helping. While his anti-business rhetoric has softened, the President still incites class warfare by insistingthat our financial problems can be solved by soaking “the rich.” Hehas no plan to cut the deficit; even the Democratic Senate unanimously rejected hiswhimsical 2012 budget.
Congress is not likely to make decisions focused on long-term economic growth either. Democrats will not cut entitlements and want higher taxes; Republicans will not cut military spending and will not raise taxes. Given the intensity of fights over short-term fixes and tax cuts, it’s no surprise the middle ground in long-term solutions has become more like the Demilitarized Zone.
So we are a nation without strong leadership, clear strategy or defined direction. The result is a business environment without any sense of long-term stability or confidence. Indeed, the recent Global PWC Survey of more than 1,000 CEOs added two top concerns of CEOs: the“public deficit” and “increasing tax burden,” which had not appearedon the list of top risks related to government policies the previous four years.
If you agree that on our present path the U.S. economy will weaken, then our decline must factor in your business strategy, board discussions and planning. Leaders have aresponsibility to shareholders to considerthe prospect of economic decline, as well as a moral imperative to act to resist this decline.
Yet, when business leaders do speak out, it’soften in favor of wasteful short-term solutions like the stimulus, Cash for Clunkers, first-time homebuyer subsidies and assorted government largesse. But business leaders have to think strategically and consider the long-term health of the U.S. economy. Isn’t our nation’s economic health more important than any of these short-term “feel-good fixes,” especially when the short-term fixes yield such painful hangovers?
Three years ago, tech company CEOs on the Board of the Consumer Electronics Association (CEA) concluded that our economy is in danger in the mid- to long-term due to the actions of ourgovernment.
CEA started the Innovation Movement asa grassroots movement for individuals and businesses alike to step out and speak up, to insist that our elected officials set a new tone for the U.S. economy andstart pursuing policies that will actually encourage growth, innovation and entrepreneurship. CEA’s Innovation Movement is committed to cutting thedeficit, promoting free trade, attracting the bestand brightest to Americaand making a broader spectrum available for wireless broadband innovation.
Once upon a time, America’s businessmen and entrepreneurs were social and political leaders. Too often now we leave those leadership duties to others who, frankly, don’t know what it takesto run a business or create wealth. But we have an opportunity to reclaim them and take a stand for what is best forour nation.
What can you do?
*. Urge your own trade association on a similarpath.
*. Give your voice to this debate within your company in its newsletters, communications and elsewhere.
*. Join and urge your employees, partners, suppliers and customers to join the Innovation Movement or similar efforts like NoLabels.

In July, more than 200 CEOs gathered at the New York Stock Exchange to honor Ford Motor Company’s CEO, Alan Mulally as Chief Executive magazine’s CEOof the Year. Mulally was the 26th CEO to receive the award, joining the ranks of such luminaries as Microsoft’s Bill Gates, GE’s Jack Welch and Intel’s Andy Grove. Chosen for the honor by a panel of CEO peers, Mulally stood out amongthe year’s final contenders for achievinga seemingly insurmountable challenge—bringing the American icon back fromthe brink of bankruptcy, noted Hugh Grant, CEO ofMonsanto and outgoing CEO of the Year, in presenting the award.
Grant echoed the thoughts of many in the crowd that night when he praised Alan Mulally for “using adversity in tough times as a springboard for innovation” and “balancing the needs of owners, employees, customers and stakeholders at large.”
NYSE Euronext CEO Duncan Niederauer also called out Mulally’s pursuit of innovation in the face of both a precarious financial situation internally and global economic uncertainty—conditions that might well have sent others running for the hills. Ford could haveacted like a car companyand simply introduced a new car, he said, “but Alan said, ‘We’re more than a car company, we’re a technology company.’”
In receiving the honor, Mulally noted that he was accepting the recognition on behalf of everyone at Ford Motor Company. He went on to acknowledge that the business community continues to face a challenging environment, but urged today’s leaders to persevere. “There has never been a time in history when CEOs were needed more than today,” said Mulally. “Leadership is so important and so needed in so many areas—economic development, energy independence and security, environmental sustainability. It’s an honor to be here tonightand to serve with the CEOs who continue to provide economic growth, great opportunities and great careers.”

Within capitalist economic systems , the drive of enterprises is to maintain and improve their own competitiveness, this practically pertains to business sectors.

It’s very important for business to return to the place where first and foremost it creates value for society. If we return to that, business will quickly restore the trust it has lost.

If we’re going to compete against the comparative advantages of other countries, given that we’re relatively higher in costs, innovation has to be the way that we do it. And that innovation has to besupported holistically

sorry dude, most of us don't take the time to read copy and past articles. If you want to get people informed just summarize, give your opinion, and post a link.

Ok

You can innovate all you want, but when you have countries that aren't part of the WTO taking your patented materials and reverse engineering them, selling them on the open market for 50% of the cost you are selling them for how do you compete with that?

You don't..

China has reverse engineered almost every produce of ours they have ever laid their hands on. There appears to be almost no pushback from the US government for patent violations. China has openly fake Apple stores, copied drilling equipment, and even a plant that make Chevys where the doors exactly fit the real thing ... except no Chevy brand.

The suggested solutions in the posted text do not appear to have much sense of reality.

The Guy in the WH needs to drive Corporate Taxes even higher,to make sure what ever is left goes to crap as well!
Because it is THIS that Lout is supporting!



And the Keynesian Economic Model is what has gotten the World into the mess it is in,in the first place!

The problem is globalization. The corporations are spreading propaganda in the US to promote what is termed the "Chinafication" of the American worker.

The chinese are not stealing our innovation and technology, we are giving it to them. Just look at what GE is doing.

The bottom line is that if any company is going to compete in a global market place, they are going to take their jobs and manufacturing plants overseas or out of the country, to get their products produced cheaper.

Americans are competing with Chinese and Mexican labor....how are we going to win? If you listen to the right wing, we blame the unions and bust them up, create jobs in America, paying minimum wage....and then lets do away with the minimum wage and shaaazaaam, we have become just like the chinese factory laborer.

Open your eyes.

I like the idea., value for society, as opposed to just profits for stockbrokers and ceos,,,

I dont know if they are against corporations: this is what the website says

'Occupy Wall Street is leaderless resistance movement with people of many colors, genders and political persuasions. The one thing we all have in common is that We Are The 99% that will no longer tolerate the greed and corruption of the 1%. We are using the revolutionary Arab Spring tactic to achieve our ends and encourage the use of nonviolence to maximize the safety of all participants'


I think they are making a stand to draw attention to greed and corruption , a very broad purpose

but so was drawing attention to 'government spending' as the tea party tried to do,,,

The Tea Party is very different," said Cantor."The Tea Party were individuals that were attempting to address their grievances, seekingredress of their grievances, from the government they elected. It's different, from what I see, of the protesters on Wall Streetand elsewhere, that are pitting themselves against others outside ofgovernment in America. That's the difference. As far as what Steny said... all I can tell you is, folks who were involved and continued, and continueto be so, in the Tea Party, are worried aboutgovernment and its policies. It's not pitting one part of our country against another. And you didn't hear most of [Republicans] us encouraging any type ofviolent behavior, or whatever, when that was occuring. Everyone in this country has the right to speak out. That'sthe beauty of our system. But when elected leaders come in, and condone attacks on others in our country, that's not how it was [with us], it's not leadership."

yeah tea party thought government screwed people

occupiers think wall street screws us

Im sure they both could bring up examples of where they are correct

,, so , I dont see the difference

the government is one element, wall street is another and big business are another,,,they lie down in bed together often so confronting one is not much different than confronting the other,,