President Trump returned Tuesday to his oft-repeated talking point that the United States is the most heavily taxed nation on Earth. He’s wrong.
According to pool reports, Trump made the false claim in the Oval Office during a meeting with former Secretary of State Henry Kissinger.
“I will say that we’re the highest-taxed nation in the world. People want to see massive tax cuts,” Trump said.
Trey Yingst, chief White House correspondent for One America News, a conservative cable news channel, confronted White House press secretary Sarah Sanders about the claim, which Trump has made before, during the press briefing later Tuesday afternoon.
“Why does the president keep saying it? It’s not true overall,” Yingst asked.
“We are the highest-taxed — corporate tax — in the developed economy. That’s a fact,” Sanders responded.
But Yingst was not satisfied with Sanders answer.
“That’s not what the president said,” he said.
“That’s what he’s talking about,” Sanders replied. “We’re the highest corporate-taxed country in the developed economies across the globe.”
“Sarah, that’s accurate but the president keeps repeating this claim that we’re the highest-taxed nation…” Yingst said.
Looking visibly annoyed, Sanders said, “We are the highest-taxed corporate nation.”
“But that’s not what he said. He said we’re the highest-taxed nation in the world,” Yingst said.
“The highest-taxed corporate nation. That seems pretty consistent to me. Sorry, we’re just going to have to agree to disagree,” Sanders said, before moving on to the next question.
The Congressional Budget Office, the federal agency that provides budget and tax information to Congress, reports that the U.S. has the top statutory corporate tax rate (39.1 percent) of the G20-member countries.
However, the United States’ average corporate tax rate — “the total amount of corporate income taxes that companies pay relative to their income” — of 29 percent is ranked third behind Argentina (37.3) and Indonesia (36.4). The United States’ effective corporate tax rate — “the percentage of income from a marginal investment … that must be paid in corporate income taxes” — of 18.6 percent is ranked fourth behind Argentina (22.6), Japan (21.7) and the United Kingdom (18.7).
When looking beyond the G20, the United States has the third-highest general top marginal corporate income tax rate in the world, at 38.92 percent, according to the Tax Foundation, a Washington-based think tank that researches U.S. tax policies. It trails the United Arab Emirates and Puerto Rico, which has its own tax code.
But Trump has repeatedly said that the U.S. is the most-heavily-taxed nation in debates and speeches.
This is not true. Trump sometimes says corporate tax rate. He knows what's correct. Instead he chooses to lie by referring to all taxes. https://t.co/kRiNWUpLRU
— Daniel Dale (@ddale8) October 10, 2017
PolitiFact rated Trump’s claim that the U.S. is “the highest-taxed country in the world” as false in February 2016 after a Republican primary debate. The fact-checking website concluded that the U.S. “is far from the most-taxed nation in the world, whether it’s an advanced industrialized economy or not.”
The Organization for Economic Co-operation and Development (OECD) estimates that taxation accounted for 26.4 percent of the United States’ gross domestic product (GDP) in 2015. That’s lower than the 34.3 percent average for the 35 countries in the OECD. Denmark had the highest total tax take of 46.6 percent.
OECD data reaching back to 2001 shows that tax bills in the United States are below average for developed countries, the Pew Research Center concluded.
The Committee for a Responsible Federal Budget (CRFB), a public-policy think tank, said that Trump would also be wrong if he was talking about federal income tax rates for individuals. The Netherlands’ highest national income tax rate is 52 percent. That’s more than 12 percentage points higher than the top federal individual income rate of 39.6 percent in the U.S.
“Notwithstanding our high corporate tax rate, the U.S. is not close to being the highest-taxed country in the world,” CRFB concluded.
Determining which country has the highest tax rate is complicated and depends on the data researchers examine. Using data from OECD, Investopedia reported that Portugal has the highest tax rate for people with high incomes (61.3 percent); Belgium has the highest level for average-earning single people without children (42 percent); and Turkey has the highest levy for average-earning married couples with two children where only one spouse works (25.8 percent). And according to the World Economic Forum’s Global Competitiveness Report, Argentina’s total tax rate is an extraordinary 137.3 percent.
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