Today, on Fox News Channel’s The Five, liberal panelist Bob Beckel praised President Barack Obama’s efforts at job creation: “One good sign of the economy is there are more manufacturing jobs created in the last two years than the last eight,” he said.
Beckel did acknowledge that American manufacturing was still in a bad state, and lamented that the manufacturing sector “has been bleeding jobs because corporations are going to find cheap labor overseas.”
His conservative colleague, Republican strategist Andrea Tantaros, interjected: “So cut the corporate tax.” Fellow conservative Eric Bolling backed her up–“A hundred percent right, Andrea!”–and added that U.S. corporations pay the highest tax rates in the industrialized world, after Japan recently lowered its rate.
Beckel, on the defensive, retorted: “As much as Botswana?”
Tantaros and Bolling didn’t know what to say, and appeared to concede the point: “Botswana? Botswana is the bar? Botswana?” Tantaros protested. “That was a joke,” Beckel reassured her.
It must have been a joke–because, in fact, Botswana does have a far lower corporate tax rate than the U.S., which has helped propel Botswana to rapid and sustained economic growth.
The basic corporate tax rate for large firms in the U.S. is 35 percent. Until recently, the corporate tax rate in Botswana, according to a two-tier formula, was 25 percent. Last year, the government of Botswana announced that it was simplifying its tax code and moving to a single corporate tax rate of 22 percent. Manufacturing companies in Botswana pay an even lower rate of 15 percent. Only the smallest U.S. firms pay 15 percent tax.
Furthermore, according to the World Bank, the total corporate tax rate, as a percentage of commercial profits (and after all deductions and exemptions), is 46.8 percent in the U.S. and only 19.5 percent in Botswana.
Meanwhile, the U.S. federal corporate tax rate is still the highest in the industrialized world, according to the Organization for Economic Cooperation and Development (OECD)–though additional taxes levied below the central government level still put Japan’s combined corporate tax rate (39.5 percent) slightly ahead of the U.S. (39.2 percent).
So, Beckel may have been joking–but Botswana really does have a more sensible corporate tax policy, one that has led to rapid economic growth and shared prosperity.