Latest Jobs Report Confirms Desperate Need for U.S. Corporate Tax Reform
April 1 marked an important milestone in America. Not because it was April Fools’ Day, but because it marked the second anniversary of the United States claiming the inglorious title of the developed world’s highest corporate tax rate.
The U.S. hasn’t achieved comprehensive tax reform since 1986. Ronald Reagan was early in his second term as President, Michael Jordan was still five years away from his first NBA title and Pixar animation studios first opened. Over the ensuing three decades, however, our international trading partners and competitors have accomplished reform, particularly in their corporate tax codes. As a result, America’s 39% rate unfortunately stands as the world’s highest.
Americans can rightfully claim, “We’re number one” in many areas, but it’s simply unacceptable that the highest corporate tax rate remains one of them. It constitutes a continuing drag on business growth, job creation and wage increases. And as yet another disappointing jobs report today confirms, we cannot afford to maintain the status quo. Numerous studies show that a lower corporate tax rate creates jobs and economic growth, so we must shift our current strategy away from government bailouts, welfare and unemployment checks, and more toward restructuring the tax code and empowering the private sector to hire. Our world becomes increasingly interconnected each day, and we simply cannot cede competitiveness to other nations whose tax codes are far more appealing to new businesses. The U.S. spent the 20th century building an economy that was the strongest and most powerful in the world, but lack of action on tax reform jeopardizes that global standing.
Moreover, this isn’t a partisan issue. Republicans and Democrats, including Barack Obama himself, agree that it has been too long since we have undertaken comprehensive tax reform. Accordingly, there’s no excuse for further delay.
Let’s not let another three decades pass us by without corporate tax reform. Let’s instead achieve a code that actually encourages businesses to grow and hire workers.