Corporate, family, personal. Federal, state, local? Effective, marginal? "Income" or "payroll"? What were his definitions; what were your definitions. It's always struck me as foolish to get mad over my personal interpretation of the words somebody used when he didn't share the meanings I imposed on him. It's like imperialism, but at the individual level, and with language and meaning instead of territory. It's a manipulative tool when used consciously; it's a fallacy, albeit a feel-good fallacy when it's done unconsciously. Then again, who doesn't like playing with and indulging his fallacy? It can be highly satisfying.
Anyway ... Take the wiki entry on US corporate tax. https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States I choose this not because it's a great thing, but because it's a standard thing.
You can read it as saying the US has a very low tax rate (2% of GDP is federal corporate income tax in the US). The trendline for US corporate taxes has a secular trend downward. A lot of things contribute to this. This is just federal income tax, not all taxes; it doesn't include the business-side FICA tax paid for employees. It doesn't consider that profits might be different or calculated differently or that it's shown a steady drop due to increased things like payroll tax paid, both individual and business, or tax credits for corporations, the rise of a lot of small corporations instead of smaller number of large corporations, or even keeping cash offshore. I mean, if you have a profit of $500 million you'd get nailed with the top rate, but if there are 5000 corporations with profits of $100 thousand each, they'd pay a lower rate ... on the same total amount of profit. If you pass dividends through to shareholders like pensions or the wealthy--makes no difference--it's not taxable as profit by the feds as corporate profit. At the same time, often corporations in the US provide services to many employees that they'd be taxed to allow government to provide elsewhere: if we consider tax cuts to be government subsidies to business, shouldn't we consider services business provide that governments should to be business subsidies to government? Then again, we can't forget that the GDP has really increased, and some of it isn't subject to federal taxes--the government comprises a larger share of the economy than it did in the first few years shown on that graph, so "as a percent of GDP" can be a tricky number to understand. So there are reasons for the drop in the rankings, and some of them are things that, if thought about for a second, are not all that bad and others that really are bad. It's not a one-size-fits-all attitude that applies to every bit of the rationale. Collect data, understand data, then form opinion. New set of data? Repeat.
At the same time, the very same wiki entry also says that the US has the 3rd highest marginal federal corporate tax in the world, after Chad and the UAE. But that relies on understanding the difference between marginal and effective taxes, federal versus state/local taxes. High marginal rates drive behavior to keep income below where those rates kick in. It works with individuals, it works with companies. One of the earliest times my father told me off over money was when I went in and bought two 10 cent comic books. He'd given me a quarter. I gave him back the 4 cents change, because there was sales tax. He was mad: If I'd bought first one, the tax would have been less than a cent and wouldn't have been charged. Then I could have bought the second one, and not have paid tax on it. I paid 21 cents instead of 20 cents because I structured the business deal poorly. He was a steelworker and was cranky because he'd pulled the midnight shift, my mother was at work, and he had to take care of a small child after not having slept for almost 36 hours. Even steelworkers with only a high-school diploma understood tax avoidance. And, yes, it was at a point in my parents' life where they did watch, literally, every cent.
Personally, at the risk of slighting Chad and the UAE, I'd consider them insignificant enough to be ignored and say that Wiki supports Allen (whoever he is--never heard the name before). At the same time, the facts support you. Depends on the definitions used and the point to be made: both are true, but neither is false.
Note that if all that money kept offshore were to be returned, that effective rate would be increased quite a bit because a number of corporations would suddenly have that 39.5% income tax rate kick in. Still, the GDP is large enough that the 2% number isn't going to increase much.
As an aside, quite often money kept offshore has paid the income tax due where it's earned and receive a tax credit because of that, with some differences between those countries and what the US allows as far as deductions. It's not like most of that money is "untaxed", which is usually the complete description; what's should be said is that it's "untaxed by US", and instead of just slighting the UAE and Chad we slight Germany and France, as well. Of course, some jurisdictions, esp. some of the poorer circum-US countries, have very low tax rates, but some are respectable. (We'll leave aside that the trillions of dollars are "assets" and not always held in cash, so a fair amount of the "offshored profits" are things like factories and equipment and inventory. How much? Dunno. The people driving the argument have a vested interest in our thinking that it's all illicitly acquired cash, and the more the assets are invested in production facilities, the less useful the number.)
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