Cutting U.S. Corporate Tax Rate Lacks Sense of Urgency
May 19, 2011
There is near unanimous bipartisan agreement in Washington that the U.S. corporate tax rate is out of step with rates levied by most industrialized nations and that America's global competitiveness is suffering as a result. What seems to be lacking to fix the problem, however, is a sense of political urgency and a broader understanding of the substantial economic benefits that a lower corporate tax rate will generate, says Scott A. Hodge, president of the Tax Foundation.
Cutting the corporate tax rate would provide many benefits. Consider these 10:
- Cutting the corporate tax rate will promote higher long-term economic growth.
- It will improve U.S. competitiveness.
- It will lead to higher wages and living standards.
- Lowering the corporate tax rate will boost entrepreneurship, investment and productivity.
- Cutting the corporate rate also lowers the tax burden on low-income taxpayers and seniors.
- Cutting the rate will lower the overall dividend tax rate and taxes on capital.
- Cutting the corporate tax rate can attract foreign direct investment.
- It will lead to lower corporate debt and reduce the incentives for income shifting.
- Cutting the corporate tax rate can reduce compliance costs.
- And it can help the states compete globally.
Source: Scott A. Hodge, "Ten Benefits of Cutting the U.S. Corporate Tax Rate," Tax Foundation, May 2011.
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