By James Thompson
(Note: The InSource Group CEO, James Thompson, writes that Congress should address three issues that would help businesses across the country. Today’s post focuses on tax reform.)
The United States has the highest corporate tax rate among industrialized nations – 39.1 percent. This is a competitive disadvantage for U.S. businesses and our economy overall. Why invest here when it’s cheaper to do so in other countries?
Both sides of the aisle have expressed interest in tax reform. Congress should start by lowering the overall corporate rate so U.S. businesses can be more competitive; 28 percent is a target rate often cited as realistic, of course with the commensurate closing of loopholes and tax breaks originally put in place to please special interests.
A more competitive corporate tax rate would also be a step toward improving the repatriation issue which gives multinational companies an incentive to park cash overseas, where it is taxed at a lower rate. The current system taxes that money again when it is moved back to the United States. This double taxation should be corrected. Congress needs to move toward a simpler tax code to avoid the morass of tax breaks and loopholes creating unfair advantages for certain businesses and industries. Let the marketplace decide the winners without artificial means.
Members of Congress, you need to govern. It isn’t enough to just be in opposition to an issue. It is a political given that you won’t get everything you want. Instead, find pieces of legislation that are actionable and get something accomplished. This will do more than just address healthcare, immigration and tax reform. It will boost the overall economy and improve hiring in the U.S. as businesspeople will feel more confident in the future because of the action and leadership demonstrated by our elected federal representatives. Get to work because we’re watching.
(The entire letter was published in the Feb. 16, 2015, issue of the Fort Worth Business Press.)