Happy April Fools’ Day! Today marks the 2nd anniversary of the United States having the highest corporate tax rate in the industrialized world – a foolish policy situation that continues to plague our economy.
Last year, I analyzed this dubious occasion in an op-ed for the Washington Times. Sadly, virtually nothing has changed since then. The rate remains far too high. And even after all loopholes, credits and deductions are accounted for, our average effective rate is among the world’s highest. This has put American businesses at a huge competitive disadvantage when compared to international rivals.
A few weeks ago, House Ways & Means Chairman Dave Camp (R-MI) introduced a tax reform draft that would significantly alter the existing Tax Code. While NTU has several concerns about the plan, it represents a promising step toward fundamental tax reform. One of its most encouraging pro-growth provisions would flatten the corporate rate structure and move to a single rate of 25 percent – significantly lower than the current 35 percent rate. Such a change would create 391,000 full time jobs, according to the Tax Foundation.
Let’s hope that Camp’s proposal builds momentum for the passage of a new Tax Code that is simpler, fairer, and less burdensome than the current one. Otherwise, we’ll be “celebrating” on April Fools’ Day again next year.