RATE Coalition Speaks Out For Corporate Tax Reform
The United States has the highest statutory corporate tax rate in the developed world, but substantial revenues are forgone through a variety of tax loopholes and provisions. Responsible corporate tax reform could lower statutory rates while simplifying the tax code and eliminating these loopholes. The bipartisan RATE (Reforming America’s Taxes Equitably) Coalition, made up of 31 businesses and associations, recently sent a letter making the case for reform to the majority and minority leaders of the House Ways and Means Committee and the Senate Finance Committee:
The negative effects of standing still are clear. According to a recent Ernst & Young study, U.S. GDP in 2013 is expected to be between 1.2 and 2.0 percent lower as a result of our OECD-leading corporate tax rate. These foregone resources could be used to make further investments in the economy. Additionally, American workers will continue to feel the pinch in their paychecks as a result of our uncompetitive tax system. Over the long term, U.S. wages will be depressed by 1.2 percent as other countries seek to lower their corporate tax rates. The American economy, American business and American workers can no longer afford our tax system. It is outdated, unfair and in desperate need of reform – this year.
Our companies understand that such an approach may require some businesses to pay a little more and some to pay a little less, and that nearly all businesses will need to forgo certain provisions that are in place today. As members of the RATE Coalition, our companies collectively recognize that base broadeners, such as the elimination of tax expenditures, may be required in order to achieve a corporate tax rate that is globally competitive, supports U.S. economic growth and is equitable to all U.S. businesses.
Thankfully, the time is ripe for tax reform as politically momentum and public interest has grown dramatically, especially in the past year. If you would like to try your hand at corporate tax reform, visit our Corporate Tax Reform Calculator and choose from some of the options policymakers have to modify the corporate tax rate. Tax reform will be no easy feat to accomplish, but with the clear rewards that can be gained, hopefully Congress will follow through.