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U.S. and Japan Want Lower Corporate Taxes to Enhance Global Competitiveness

U.S. and Japan Want Lower Corporate Taxes to Enhance Global Competitiveness

Posted December. 19, 2007 03:13,   


Signs of a reduction in corporate taxes in the U.S. and Japan to improve business global competitiveness have been seen recently.

The Nihon Keizai Shimbun reported on Tuesday that the ruling Democratic Party in Japan’s upper house decided to include corporate tax reduction in its 2008 tax revision bill what will be finalized this month.

The party explained, “Support for business is important because of intensifying competition arising from globalization and informatization.”

It is unusual that the Democratic Party representing labor and the disadvantaged is being more active in pursuing the revision than the Liberal Democratic Party, which has maintained a favorable relationship with business.

U.S. Secretary of Treasury Henry Paulson said during a press conference on Monday that, “The treasury is going to disclose tax reduction provisions with which the treasury and business leaders via discussions.”

The U.S. corporate tax rate is 35 percent, the second highest among the 30 OECD members.

Considering the opposition party-controlled U.S. Congress, the treasury secretary said, “The provision will not come in the form of a specific bill.” The opposition party has been critical of tax revisions.

Bloomberg reported on Monday, “The treasury has been grappling with two avenues of corporate tax reduction: imposing taxes on all corporate revenue or on revenues created only on U.S. soil.”

iam@donga.com srkim@donga.com