Bill Clinton is calling for a reduction of US Corporate Tax rates to at least OECD average (~25%) and a vast reduction in corporate tax complexity (ours code is currently over 10 times the length of the next most complex code. And please note, I am addressing corporate tax ONLY. Not personal income tax). Our competitive environment is changed. In the 50s and 60s we were the only game in town and could charge whatever we wanted. Today, we have serious competition all over the world. It is time to acknowledge our current corporate tax code is a serious hindrance to our competitiveness and a significant factor in both inversion (an accounting shift of profits, for the most part), and companies just flat out shifting their physical production (and the jobs and profits that go with them) to other countries. Yes, according to the CBO, the average rate paid by corporations 12.6%. That shouldnt be surprising because business people by and large arent dumb, and multinationals have long since shifted their profits and or their production to markets where they do not have to deal with the US corporate tax code any more than required. Efforts to end inversion are laudable, but without being coupled with substantial corporate tax cuts will in the long term will simply result in companies leaving the US altogether. Mr. Clinton isnt alone in this conclusion. Tim Cook (Apple CEO) said largely the same thing some years ago. Corporate rates are BY FAR more important than personal income tax rates since they are a key factor in determining where companies will base their HQs (lots of nummy high income jobs there), production (lots of nummy solid middle class jobs there), and profits (nummy tax revenue for the host country).
Posted on: Wed, 24 Sep 2014 18:44:24 +0000
Trending Topics
Recently Viewed Topics
© 2015