Tax Reform Must Go Bold
Whatever you think of President Trump, you know he likes to win. And a commitment to winning is exactly what we need as we enter the critical drive for tax reform that can increase workers’ paychecks, reduce the cost of living and bolster savings for the future.
With more countries than ever vying for jobs and business, we need a big play for our workers, our manufacturers and all Americans.
That starts with pursuing, passing and securing the most competitive tax code America has ever seen. We should think big and go bold. Timidity never wins.
What does that mean, specifically? First, it means the corporate tax rate that businesses in America pay, and in turn limits the creation of new wealth for more, should be no higher than 15 percent — just as the president has argued.
Today, businesses in America face the highest corporate statutory rate among the 35 industrialized nations in the Organisation for Economic Co-operation and Development. The top rate in America can exceed 39 percent when you add up the federal and state rates. That’s more than 50 percent higher than the average OECD rate. We’re not even playing on the same field.
We are just handing other countries a competitive edge — making it more attractive to do business there instead of here. It’s time to reclaim that advantage for ourselves. And it begins with a rate of 15 percent.
But it’s not just the corporate rate that is essential to reform. We must stop treating our small businesses — those that file at the individual rate — as an afterthought. We have to seriously lower rates on small businesses.
Many small businesses face marginal tax rates of more than 44 percent, thanks in part to the additional taxes from the Affordable Care Act. That’s shameful. Our elected leaders love to talk about how they admire small businesses, but the best way to show they stand with small businesses would be supporting bold reform that helps them grow, hire and hold their own. Just give them a chance.
In addition, we have to stop punishing U.S. companies, which have already stuck with us in the face of a punishing tax code, when they reinvest overseas earnings back into the United States. American-based companies are double-taxed on overseas earnings brought back home while foreign-based companies are not.
We need to fix this by moving to a territorial tax system like the rest of the world, so more companies can invest in American workers and facilities without paying a steep price for doing so.
Manufacturers will also be looking for strong incentives for research and development as well as robust capital expensing — both of which translate into more investment in the United States and more American jobs.
Manufacturers expect our leaders to fight for these priorities, in particular the 15 percent corporate tax rate and major cuts to small business taxes. If you don’t support reform, then you’re supporting some form of the status quo, which means you’re supporting fewer jobs, slower wage growth, less money for families, less R&D and less innovation.
There are some out there who are nervous about short-term deficits. Let’s be clear: Tax reform is not about what happens in the short term. It’s about building the foundation for the long-term strength of our families, our companies and our economy.
If we start fretting about short-term issues, we’re thinking small and being shortsighted. Bold tax reform is about looking beyond the horizon. We have the chance to unleash the American economy for American workers like we haven’t seen in generations.
Throughout our history, our nation has accepted that sometimes we have to run a deficit, particularly in times of crisis or difficult circumstances. And it is a crisis that our workers and our businesses find themselves at a serious disadvantage in today’s world — and that jobs and investment have left and are not coming back unless we act now.
Certainly, we’re on better footing than we were following the Great Recession. But that’s setting a very low bar. Other nations are asserting themselves. They have done what we only talk about: aggressively lowering tax rates.
It’s time to tackle this national crisis head-on before the rest of the world leaves us behind completely.
Our president has given us the right play. Our leaders in Congress should run it, not fumble the ball by thinking we can’t win his way. Let’s think long-term and act boldly. Our future depends on it.