Most of the time being number one is good. But when it comes to having the highest tax rate in the world, it is much better for a country to be bringing up the rear.

Currently Japan holds the inauspicious distinction of having the highest corporate income tax rate in the world (39.5 percent). The United States is a close second, only a few tenths-of-percentage points behind.

Japan will soon fall from the top spot because it has finally recognized what the rest of the industrialized world realized over a decade ago: A low corporate income tax rate is vital for economic growth in the global marketplace. As such, Japan just announced it will reduce its corporate income tax rate by 5 percentage points down to around 35 percent. This remains far above the 25 percent average rate of other industrialized countries, but for them it is a start.

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