boards of FL wrote: colaguy wrote:Please explain why it is relevant that Norway’s corporate tax % = 10.4% of its GDP, and the US corporate tax % = 2.6% of its GDP.
Well, this is a discussion about corporate tax burden, and it has been suggested that American companies feel the heaviest burden of any nation on earth due to the fact that "Our corporate tax rate is the highest in the industrialized world. That's a problem.", as Joanimaroni put it.
If we're going to compare corporate tax burdens across various countries, we first need to sync them all to some common denominator - Corporate taxes as a % of GDP.
I'm amazed that you were somehow able to make it through high school and this be a foreign concept to you, as I'm pretty sure things like finding a lowest common denominator before comparing or adding fractions is a concept that is taught in elementary school.
Imagine seeing two people argue:
Person A: I say that 7/10 is a bigger number than 4/8.
Person B: What?!?! I say that 4/8 is a bigger number than 7/10.
Elementary school math shows us that we can solve this dispute by finding a lowest common denominator and then comparing.
7/10 can be converted to 28/40 by multiplying by 4/4, or, 1.
4/8 can be converted to 20/40 by multiplying by 5/5, or 1.
So now we are essentially comparing 28/40 to 20/40, and we can conclude Person A is correct. We know this because we synced these two things to some common denominator that allowed us to make direct comparisons.
If we're going to compare corporate tax burdens across countries that have varying economies and marginal tax rates, the most straightforward approach is to convert each country's tax burden to some common denominator or expression - such as corporate taxes paid as a % of GDP. This allows us to state each country's tax burden as a function relative to its overall economy - which allows us to make direct comparisons.