HIGH CORPORATE TAXES???

Not so much, really, at least according to the Wall Street Journal. Although the top statutory rate is 35%, on average companies paid about 25.3% in 2005. This conflicts with the study done by KPMG but seems more realistic.

Tax Data Highlight Corporate Loopholes
By JESSE DRUCKER
NOVEMBER 13, 2008

The Internal Revenue Service found that U.S. companies paid federal income taxes on their reported U.S. profits at far less than the 35% statutory rate, offering a potential revenue source for an incoming presidential administration that faces a yawning budget deficit.

Newly released data from the IRS show companies paid federal and foreign income taxes on their U.S. book income -- the amount reported to shareholders -- at a rate of 25.3% during 2005, the most recent year for which data were made available by the IRS.

The IRS data are based on filings by 38,516 U.S. companies with fiscal years that ended between July 2005 and June 2006. The data on effective tax rates were included in tables accompanying an article by IRS researchers in the trade journal Tax Notes.

The new IRS data largely exclude overseas profits, meaning lower tax rates abroad aren't the main factor driving the low effective rate on U.S. income.