Are U.S. Corporate Taxes Really That High?

This election season, companies like Microsoft Corporation MSFT, General Electric Company GE and Apple Inc. AAPL have been criticized by both candidates for the massive cash hoards the companies have stashed overseas to avoid U.S. taxes. The companies claim U.S. corporate taxes are simply too high for them to justify bringing that cash back into the country.

Are U.S. corporate taxes really so high? As it turns out, yes they are.

They Aren't Wrong

According to Tax Foundation, the U.S. top marginal corporate tax rate of 38.92 percent is the third highest rate in the entire world. The top U.S. corporate tax rate far exceeds the global average of 22.5 percent. European countries average only an 18.55 percent rate.

U.S. small businesses earning less than $100,000 per year in income are not subject to the top marginal tax rate.

The only two countries with higher peak marginal corporate tax rates than the United States are Puerto Rico (39.0 percent) and the United Arab Emirates (55.0 percent).

On the other end of the spectrum, Montenegro (9.0 percent), Turkmenistan (8.0 percent) and Uzbekistan (7.5 percent) are the only three nations with top corporate tax rates in the single digits.

U.S. companies are currently holding more than $2.5 trillion overseas to avoid corporate taxes. Microsoft, GE and Apple are the three largest offenders.

As Related To Tuesday

Republican presidential nominee Donald Trump plans to reduce the U.S. corporate tax rate to 15 percent and enact a repatriation rate of only 10 percent for companies with cash overseas.

Democratic nominee Hillary Clinton plans to maintain the current corporate tax rates.