Cut Corporate Taxes, Too
AMERICA’S OBSCENELY HIGH RATES ARE CHOKING OFF INVESTMENT, JOB GROWTH
This website believes that individual income tax relief is the best way to stimulate economic growth in America, but we also support reducing our country’s obscenely high corporate tax rate.
According to a new report from The Cato Institute, the United States has a marginal effective corporate tax rate of 35.6 percent – the fourth-highest rate in the world and the highest rate among major industrialized nations. That’s a major disincentive to economic growth when you figure that the average corporate tax rate around the world is just 18.2 percent.
Despite large budget deficits in many countries and the popularity of anti-corporate sentiments, few countries have raised their corporate tax rates in recent years, and many countries have reduced them,” the report finds. “Countries have recognized that corporate tax rate cuts help spur growth and that revenue losses will be minimal because lower rates help attract profits from abroad through transfer pricing and financial restructuring.”
That’s true … as this website has argued ad nauseam for years, tax cuts pay for themselves in the form of economic growth.
For example in Canada, the corporate tax rate was slashed from 42.4 to 29.4 percent from 2000-2010 – yet the percentage of government revenue from this source remained constant over that time period.
U.S. President Barack Obama has proposed trimming the corporate tax to 28 percent, while GOP presidential nominee Mitt Romney wants to cut it to 25 percent. We believe it should be reduced even further than that. More importantly, we do not subscribe to Romney and Obama’s position that tax cuts should be offset with revenue enhancements elsewhere in the federal budget.
2012 Corporate Tax Competitiveness Rankings (The Cato Institute)