The Big Story
Uncle Sam as a Partner
A business class professor often reminded us, “Every business has a partner: the government.” There are many ways that the government and its laws and regulations impact business, but one universal factor is taxes.
The Tax Cuts and Jobs Act passed by Congress just before Christmas took effect January 1st. How will the Act impact the Retail Industry?
To provide a general and global perspective, Ernst & Young reports that the U.S. has had the highest federal corporate tax rate in the world at 35%, which on average increases to 39% including state taxes. This compares to a worldwide average of 25.8% or a modestly higher GDP-weighted average of 27.9%. The global book ends have been the United Arab Emirates at 0% and the U.S. at 39%. In between are Russia (20%), the U.K. (21%), China (25%), Canada (26%), Australia (30%), Germany (30%), Mexico (30%), Brazil (34%), India (34%), Japan (35%) and France (36%). Moreover, the U.S. has not had comprehensive corporate tax change in thirty years. In the meantime, the global average corporate tax rate has decreased approximately 15%.