President Trump said it again today: “We're the highest-taxed nation in the world,” he told reporters, repeating the claim twice. “It is his go-to talking point, his favorite line as he tries to lead the Republican Party to a once-in-a-generation overhaul of the federal tax code,” writes Politico’s Matthew Nussbaum. “It is also false — something fact checkers have been pointing out since 2015 when Trump first began declaring it on the campaign trail.”
Asked about the false claim again on Tuesday, White House Press Secretary Sarah Huckabee Sanders defended the president’s line by saying the president actually means that the U.S. has the highest corporate tax in the developed world. When a reporter, One America News Network's Trey Yingst, pointed out that that’s not what Trump said, Sanders held firm. “Seems pretty consistent to me. Sorry, we're just going to have to agree to disagree," Sanders said.
The fact-checkers have been clear and consistent on this point: The U.S. is not the highest-taxed nation in the world, and it’s not the highest-taxed nation in the developed world, either. The U.S. does have the top statutory corporate income tax rate in the developed world at 35 percent, but if you look at the effective rate companies actually pay after deductions and tax credits, the U.S. falls behind countries like Argentina, Japan and the U.K.
But while Trump may be using the talking point as a way to drum up support for cutting the statutory corporate rate, experts say the line is problematic because it steers the debate away from fixing the tax code. "It confuses the argument for tax reform," the Tax Foundation’s Kyle Pomerleau told Politico. "The structure of the tax code is broken and you can go down a long list of reasons that's the case." Fixing it will require much more than just cutting rates.
