By Teresa Welsh |
When Japan lowers its corporate tax rate on April 1, the United States will have the highest corporate tax rate among industrialized nations. That's why it was very good news when, earlier this week, the Obama administration proposed plans to lower the corporate income tax rate to 28 percent and take steps to broaden the base.
In these polarized times, we now have a rare point of agreement. This administration, Republican and Democratic members of Congress, and the nation's leading employers have come together over the proposition that a meaningful reduction in the rate, combined with a broadening of the base, is necessary to allow U.S. businesses to compete in today's global marketplace. This continued momentum and bipartisan support in all branches of government presents a unique opportunity to accomplish such a significant milestone in an election year.
The RATE Coalition, a group of 26 companies and organizations employing approximately 30 million people across all 50 states, supports corporate tax reform. We welcome the Obama administration's recognition of the negative impact the current 35 percent corporate tax rate has on our economy. While a rate reduction of 28 percent is a step in the right direction, the goal of all parties should be to lower the rate to 25 percent, the average of Organisation for Economic Co-operation and Development, or OECD, countries. There are many advanced economies with even lower rates—Switzerland has an 8.5 percent rate and Ireland has a 12.5 percent rate. A corporate tax rate that is above the OECD average will only keep U.S. corporations at a competitive disadvantage. We understand that the country needs deficit reduction and hope that as the analysis of possible offsets is completed we can get to the lower rate.
About Elaine Kamarck Co-chair of the RATE Coalition
Nick Tuszynski Fellow at George Mason University's Mercatus Center
William McBride Economist at the Tax Foundation
Ryan Ellis Tax Policy Director at Americans for Tax Reform