Today’s tax code is broken, outdated and impedes, rather than improves, opportunities for job creation here in America. While the list of facts and figures confirming this is well-known, one fact in particular stands out: As of April 1, 2012, the United States has the highest corporate tax rate in the industrialized world.
Clearly, Congress must examine and develop ways to achieve broad-based tax reform that will allow families to thrive and employers to create jobs. Republicans have put forward a comprehensive tax reform plan that levels the playing field for American workers and employers competing in the global marketplace. The GOP plan to lower rates and broaden the base – an approach that has been hailed from both ends of the political spectrum – will create a code that is simpler, flatter and fairer for all Americans.
Comprehensive Tax Reform – It’s About Jobs!
Republicans are calling for comprehensive tax reform that cuts tax rates, eliminates lobbyist loopholes and keeps taxes at historically normal levels – between 18 and 19 percent of Gross Domestic Product (GDP). Independent economists have said, when coupled with spending constraints, this tax reform will help spur the creation of a million jobs in the first year.
Employers Prefer to Give up Deductions and Credits for a Lower Rate
In Ways and Means Committee hearings throughout the 112th Congress, employers have reinforced the idea that lower tax rates, more certainty and greater simplicity in the tax code will lead to a climate ripe for job growth while promoting U.S. competitiveness in the global economy.
Strengthening America’s Role in the Global Economy & Creating Jobs Here at Home
A key component of the House Republican tax reform plan is shifting away from our current “worldwide” system of taxation – which double taxes American companies when they attempt to compete with foreign companies in overseas markets – to a more competitive “territorial” tax system that puts American companies on a level playing field with our foreign competitors. Virtually every developed country has already abandoned a worldwide system of taxation and the President’s own Bowles-Simpson commission recommended the U.S. do so as well.
A worldwide system that is paired with a corporate that is too high is the exact opposite formula for job creation, and that is why we must adopt a territorial system and lower our tax rates. In its effort to reform our highly technical and complex international tax laws, the Ways and Means Committee has held many public hearings involving these policies. Last fall, building on the testimony received, the Committee released a discussion draft of a territorial tax plan to garner more specific input from employers, workers, tax practitioners and other tax experts.