We should not bat an eye at reducing the 35 percent federal corporate tax rate.Update: From our friends at Cato@Liberty, add yet another country to the list of those lowering corporate tax rates:
And, while we’re at it, we should cut the corporate capital gains tax rate as well. Loews CEO James Tisch, who is justifiably concerned about our long-term competitiveness, is pushing this latter proposal. He believes that hundreds of billions of languishing corporate asset dollars would be unlocked and reinvested if this were to occur. He’s right. The result would be an inevitable infusion of new oxygen into the corporate bloodstream. It would create new businesses and greatly expand existing ones. All this would of course create tens of thousands of new jobs for American workers, not to mention a tidal wave of new tax receipts at Treasury.
Right now, the US and Japan are the flag bearers of the highest corporate tax rates in the world. (When one includes state taxes, the US rate is actually higher—40 percent). Yet, the EU average according to Washington policy analyst Dan Clifton is only 27 percent. And virtually every country around the globe is slashing away at their corporate income tax rate. Ireland’s booming economy boasts a corporate tax rate of only 10 percent. Even France comes in lower than the US. It’s quite clear that we have put ourselves at a significant competitive disadvantage in a very palpable, real sense.
Kiwi officials openly admit that these reforms are driven by a need to compete with other nations, further confirming the need to protect and promote fiscal rivalry from the anti-competition schemes of international bureaucracies such as the Organization for Economic Cooperation and Development.