Indianapolis News and Headlines


Fact Check: Trump said we're "the highest taxed nation in the world"; rated False

Posted at 3:50 PM, Dec 01, 2016
and last updated 2016-12-02 09:48:41-05

INDIANAPOLIS -- President-elect Donald Trump said Thursday his administration will change the business tax from 35 percent down to "hopefully 15 percent" to alleviate the country from being "the highest taxed nation in the world."

Trump made the comments while at Carrier announcing the deal he reached with the company to save more than 1,000 of the 1,400 jobs that were slated to move from the west side Indianapolis plant to Monterrey, Mexico.

"One of the things we're going to be doing to keep (companies in the U.S.) is lowering our business tax from 35 percent hopefully down to 15 percent, which would take us from the highest taxed nation virtually in the world, which is terrible for business, to one of the lower taxed, not the lowest yet, but one of the lower taxed," Trump said. 

Trump's comments about the United State being "the highest taxed nation in the world" is a rhetoric he used repeatedly throughout his campaign, but according to our fact-checking partners at Politifact, the statement is false.

READ MORE | Carrier gets $7M in tax breaks to keep jobs in Indy

When our partners at Politifact looked at this claim in the past, they compared the United States to the 33 other industrialized nations in Organization for Economic Cooperation and Development.

Data from 2014, the most recent year available, shows that the United States wasn’t the most highly taxed by the typical metrics and actually places near the bottom or around the middle of the pack.

Trump specified this time that he was talking about business taxes, but the essential data doesn’t back him there, either.

Trump would have been more accurate if he had been more specific. The United States does have one of the highest top marginal corporate tax rates in the world. However, companies pay less in practice because they can take deductions and exclusions. When we look at the actual tax burden on U.S. companies, it’s far from highest in the world.

Here’s a chart breaking it down:

The World Bank’s data for 2012 — the last year for which it has complete figures — also placed the United States near the bottom in tax revenue as a percentage of GDP. Nations with lower percentages were two OECD members (Japan and Spain), a couple of oil-rich countries (Oman and Kuwait) and few impoverished states (like Afghanistan and the Central African Republic).

Politifact also looked at a 2016 report by the World Bank and PricewaterhouseCoopers that assessed the total tax burden for a case study company in different places around the world. The total tax rate — which includes not only income taxes but also labor taxes, property taxes, profit taxes, etc. — is expressed as a percentage over the total profit.

By this metric, the company would have a total tax rate of 43.9 percent in the United States, placing it at No. 64 out of 189 countries.

That’s lower than the rates the company would have paid in the two countries Trump says the United States loses to, China (67.8 percent) and Mexico (51.7 percent). Moreover, it’s nowhere near the top.

Politifact's ruling:

Trump said the United States is "the highest taxed nation virtually in the world."

By all metrics we looked at, the United States is far from the most taxed nation overall and for businesses.

We rate Trump’s claim False.

Share the Facts Widget Embed