The study comes as Washington officials are basically in agreement that the U.S. corporate tax rate is too high and should be lowered in a process that also ditches many corporate tax loopholes.
Treasury Secretary Timothy Geithner said recently that the administration was working on its own corporate tax reform plan, while lawmakers like Rep. Dave Camp (R-Mich.), the chairman of the House Ways and Means Committee, have called for a comprehensive revamping of the tax code.
In his Wednesday speech on deficit reduction, President Obama reinforced his desire to see the corporate tax code reformed, and also called for Congress to work on the individual code as well.
Still, many observers expect any tax reform to be a long process.
The PwC study tracked the companies on the 2010 Forbes Global 2000 list, which includes companies headquartered in around 60 foreign countries. The five countries imposing a higher average effective rate than the U.S., the report found, were Japan, Morocco, Italy, Indonesia and Germany.
On average, the effective U.S. rate was roughly 8 percentage points higher than the 58 other countries in the study, and about 5 percentage points above the 28 other countries in the report that are in the Organization for Economic Cooperation and Development, a group of industrialized economies.
PwC’s findings also closely track data from the World Bank, which put the effective rate at 27.6 percent for American corporations in 2009.
Geithner and others have argued that American corporations’ effective tax rate is about the average of the country’s major trading partners. Two of the countries with higher effective rates than the United States — Japan and Germany — also have among the largest gross domestic products in the world, and some of the countries in the Business Roundtable study are comparatively small economies.
Engler and the Business Roundtable, a group of chief executives, have also argued for the United States to switch to a territorial system employed by many other industrialized countries.
That would essentially mean corporations would not be taxed on profits made outside of American borders. U.S. multinationals are currently allowed to defer paying taxes on those profits until they are brought back here.
Engler also suggested on Thursday that an overhaul of the tax code should be more concerned with increasing the competitiveness of American businesses than with how much revenue it collects — a line similar to what some business leaders have said. On Wednesday, Camp said that congressional Republicans want to pursue a revenue-neutral tax reform.