Marketplace reports that President Obama is meeting with business executives today to pitch investment in the U.S.:
Last year, foreign investment in the U.S. was roughly $193 billion -- down from its peak of $310 billion in 2008.
Dartmouth’s Matthew Slaughter says the U.S. attracts investments from foreign companies by telling executives that the U.S. is "the most innovative, open, largest economy on the planet.”
But Slaughter says many foreign company leaders respond by saying growth in the U.S. has slowed compared to developing countries like China, not to mention an aging infrastructure, complicated immigration system and high corporate taxes.
Slaughter does a good job summing up the problem, however, in the past six years our infrastructure hasn’t aged a great deal and the immigration system hasn’t grown significantly more complicated. While those things don’t help, what is hurting the most is our high corporate tax rate. For the past two years running, the U.S. has had the highest corporate tax rate among industrialized economies and the effects are clearly taking a toll. This problem continues to worsen as more and more countries cut their rate each year.
As NTU has noted again, and again, and again, the best way to declare the U.S. open for business is to lower the corporate tax rate and pursue other reforms, such as rolling back burdensome regulations, making our business climate competitive once again. Before President Obama sits down with global investors, he should first sit down with the legislators on Capitol Hill who need to act before the U.S. falls further behind.