The U.S. corporate tax rate, 35%, is the highest in the industrialized world, and the gap between American and foreign rates is widening, as foreign countries are lowering their rates. This high corporate tax discourages investment and economic growth.
Most nations employ a territorial system, which taxes only their corporations’ domestic earnings. The U.S., however, taxes its corporations on their worldwide earnings. This puts U.S. companies at a competitive disadvantage and introduces far-reaching economic distortions.
In order to increase international competitiveness and economic growth, the new Congress and the incoming administration need to:
- Lower the Corporate Tax Rate
- Move to a Territorial Tax System