This will only throw fuel on the already fiery discussion of the United States’ global tax competitiveness: A report just released by the European Commission reveals that the sharp decline in corporate income tax rates in the European Union’s member states, ongoing for the past 15 years, is showing no sign of slowing. Despite the global financial crisis, five states have reduced their statutory rates this year, and none have increased them. Even Greece managed to trim its top rate, from 25 percent to 24 percent.

The Czech Republic, Lithuania, Hungary, and Slovenia were the other countries posting rate reductions this year.

There’s a fair bit of variation in the top statutory rates among the EU nations, but only four go above 30 percent: Belgium (34 percent), France (34.4 percent), Italy (31.4 percent) and Malta (35 percent). The United States’ top rate is currently 35 percent.

Of course, income tax rates alone don’t give a full picture of the corporate tax environment in any country, as I argued here. And the EU, taken as a whole, is certainly a high-tax zone, the Commission points out: On average, taxes of all types account for about 40 percent of GDP. In Denmark, it’s close to 50 percent (those happy, happy Danes don’t seem to mind, though).

Still, this report clearly strengthens the hand of those calling for a reduction in corporate income tax rates in the United States.

You can download the full text of the report, or a 42-page summary of the findings, here. ###