Our 35 percent corporate tax rate encourages businesses to move profits and jobs to low-tax nations. At the same time, deductions and loopholes allow major companies like GE and Apple to avoid paying taxes.
Done responsibly, there could be bipartisan support for corporate tax reform.
While there is agreement about the need for reform, there is major disagreement about how to proceed. Given the differing interests of corporations and a divided and dysfunctional Congress, real reform will require bipartisan support.
Instead of meaningful reform, a partisan effort is likely to result in corporate tax cuts that mainly benefit the wealthy, increase the deficit, create more pressure to make cuts to Social Security and Medicare and do little to end loopholes and tax avoidance schemes.
If Republicans are serious about corporate tax reform, they should reach across the aisle to create reform that:
• Lowers the corporate tax rate to increase the incentives for companies to locate or remain in the U.S.
• Eliminates special interest deductions and tax avoidance schemes that have allowed major corporations to escape paying most taxes.
• Keeps revenue neutral by closing loopholes & eliminating special interest deductions and offsets higher corporate profits by increasing taxes on capital gains.
• Scores tax proposals conservatively (using “static” vs. “dynamic” scoring) and uses any supply-side bump to reduce the deficit.
These are pro-growth and fiscally sound reforms that should appeal to both parties. Let Congress know you want real reform and not cuts that increase inequality and drive up the deficit.
Commented