Freedom Line Blog

In an op-ed published yesterday in The Hill, CFIF’s Timothy Lee explains why President Obama and the Treasury Department are wrong on corporate tax inversions and the only way to prevent them is to enact comprehensive tax reform now.

The simple reality is that our corporate tax rate of 35% – the highest among OECD nations – jeopardizes every domestic corporation’s very survival in an increasingly competitive global economy. Moreover, because public corporations remain under a legal fiduciary duty to their shareholders to run the most efficient operation possible, America’s unsustainably high tax rate leaves them with little choice but to explore inversion opportunities.

Tragically, even President Obama understands that reality. On several occasions, he has called for comprehensive tax reform that included lowering the corporate tax rate to a more globally competitive level. It defies logic and experience that the president called for lower tax rates out of some sentimental affection toward American corporations. Rather, he clearly understands that cutting America’s corporate tax rate allows domestic businesses a better chance of growing and competing on the international stage.

To remedy the situation, Congress must take concrete steps towards comprehensive tax reform now…There is still enough time in 2016 to achieve a deal.