Pawlenty’s source on Minnesota business taxes has been widely criticized as misleading

A few quick points about the Tax Foundation, the organization whose numbers Tim Pawlenty cited yesterday when he proclaimed that "if Minnesota were a country, we’d have the third highest business tax rates in the world" and called for a 50 percent cut in the state’s corporate tax rate:

• Dating to 1937, it’s "the oldest nonprofit tax think tank in the country." Though officially nonpartisan, it was founded in the depths of the Great Depression by captains of industry–mainly from General Motors and Standard Oil–who were demanding tax and spending cuts at the height of the Great Depression as a remedy from all those New Deal relief programs. (SourceWatch)
• It’s the sponsor of the annual "Tax Freedom Day" in late spring–the point when Americans have supposedly earned as much money in the present year as they’ll be paying in taxes.
• Last year the organization rolled out a new national campaign against US corporate taxes called CompeteUSA festooned with claims on this order: "Today, only Japan has a higher business tax rate than the U.S."
• Economists–including Paul Krugman, Linda Beale and Dean Baker–accused the Tax Foundation of numerous statistical sleights-of-hand in its CompeteUSA numbers, chief among them the use of nominal statutory tax rates rather than effective tax rates (the tab after deductions, loopholes, tax-sheltering schemes and so forth are accounted for).

Beale elaborates on that last point:

Fact is, though our tax laws include statutory rates that are fairly high (35% for corporations earning about $18 million or more annually) but generally in the same ballpark as those of other developed western nations, the actual tax rates paid by US corporations are extraordinarily low, around 6%… [T]he US is actually a corporate tax haven, with the lowest effective corporate tax rates of almost all the countries that participate in the OECD.