The U.S. is set to have the highest combined federal and state statutory corporate tax rate in the industrialized world on Sunday, April 1, once Japan drops its top rate to 38.1 percent.

While the U.S. corporate tax rate at the federal level is a maximum of 35 percent, tax cut proponents argue that the combined federal, state and local tax rates amount to 39.2 percent, beating Japan’s newly lowered rate.

Corporations have been lobbying Congress to lower the statutory corporate tax rate, even though many corporations pay far lower effective tax rates than 35 percent. On Thursday, the House passed a Republican-backed budget introduced by House Budget Committee Chairman Paul Ryan, R-Wis., which would lower the top corporate tax rate from 35 to 25 percent (see House Passes Paul Ryan Budget, Consolidating Tax Brackets). The plan builds on corporate tax reform work in the House Ways and Means Committee.

“While the April 1 date may suggest otherwise, this is no joke or laughing matter for American employers and workers,” said House Ways and Means Chairman Dave Camp, R-Mich. “As of Sunday, America will have the highest corporate tax rate in the industrialized world, making the United States a less attractive place to invest and create jobs. Given the continued weakness in our economy, now is the time to enact comprehensive tax reform that lowers our tax rates for all businesses.”

However, the Ryan budget plan is not expected to go far in the Democratic-controlled Senate. A similar budget plan from Ryan also was approved in the House last year, but failed to make headway in the Senate.

The RATE Coalition, a group of 26 companies and organizations lobbying for corporate tax reform, called for lowering the tax rate. “America taking the 'lead' in gaining the dubious distinction of being the world 'leader' in high corporate taxation is no April Fool’s joke. The United States is soon to be 'number one’ in anti-competitiveness,” said James Pinkerton, co-chair of the RATE Coalition and a former White House domestic policy adviser to Presidents Ronald Reagan and George H.W. Bush. “Our corporate tax code, including the world-leading rate of 35 percent, leaves us in a weaker position relative to other leading economies. That’s bad news for growth and jobs. But the good news is there’s a sensible solution: lower the corporate rate to be in line with our competitors. And there are many signs that the bipartisan political will exists to achieve that lowering.”

Dean Zerbe, the former senior counsel and tax counsel to the U.S. Senate Committee on Finance and the current managing director of alliantgroup, does not expect to see much action in Congress on tax reform until after the November election, although he believes there may be some movement on small business tax cuts, especially in areas such as research and development.

“The legislation Senator [Chris] Coons is talking about, I heard a lot about it on the Hill, for helping small businesses,” said Zerbe. “Senator [John] Cornyn is also thinking about legislation for small businesses, and I think it will attract a lot of interest as well. Clearly the elected folks on the Hill are talking a lot about tax cuts for small business.”

On Wednesday, the House Ways and Means Committee passed the Small Business Tax Cut Act, sponsored by House Majority Leader Eric Cantor, R-Va., which would allow companies with fewer than 500 employees to deduct up to 20 percent of their active business income, or profits, with a limit of up to 50 percent of the wages paid to employees who do not own the business (see House Panel Passes GOP Small Business Tax Cut Bill). But Zerbe noted that the response to the bill has been muted so far.

“In some ways it’s frustrating for the business owners,” said Zerbe. “They’re saying, ‘I don’t know if a one-year deal is going to help me one way or another.' It’s not like the business groups are throwing bouquets at it. They’re not going to look a gift horse in the mouth, but it’s not like it’s hosannas either. They want permanency and certainty when looking at the rates. Maybe in the fall we’ll at least get something passed on accelerated depreciation.”