Economists, Academics Push for Reform of Corporate Income Tax System
Economic Research Affirms that Reform is Critical to Improving U.S. Job Creation and Investment
Thursday, November 10, 2011
Washington, DC - This week, a group of 20 academics and economists sent a letter to the House Committee on Ways and Means and the Senate Finance Committee calling for a reduction in the corporate tax rate. Noting that the United States has the second highest statutory combined corporate tax rate of all 34 OECD countries, the signers encouraged U.S. policymakers to reduce the corporate tax rate to a level that “is competitive with the rates in almost all other major industrial countries.” The average corporate rate of OECD countries is 25 percent, the goal set by Ways and Means Committee Chairman Dave Camp (R-MI) and included in the House-passed budget. The academics and economists also emphasized that any approach “should seek to eliminate exemptions to the tax rate to ensure that the reduction in rates is budget-neutral.”
In making their case for reform, the signers outlined four major barriers created by the current corporate tax rate, arguing that it:
1. Undermines job creation and reduces wages;
2. Impairs our ability to attract domestic and foreign investment;
3. Distorts financial and economic decision-making by U.S. firms; and
4. Spawns inefficient government programs and policies.
The full letter can be read here.