Corporate Taxes in a Global Economy

Corporate tax rates are like golf--it’s not good to get the high score. Yet that is just about to be our dubious distinction in the United States if Japan, as expected, chooses to lower its corporate tax rate early in the new year.

Why does this matter? Because the future will be decided by talent and capital, and it’s easier than ever for those to flow across national boundaries. The U.S. frequently benefitted from inflows of both during the twentieth century but we should not take it for granted that we always will. We’re in a global competition and suffering the highest corporate tax rate is not going to help us win.

The Congress and the Administration proved that they could work across party lines in extending the current personal tax rates. As Bloomberg reports, the business community believes the new year will be the right time to address corporate tax rates, starting with the proposed budget in February.

For a more detailed look at the corporate tax reform picture, watch the Chamber’s chief tax counsel Caroline Harris on Bloomberg TV from earlier today.

By U.S. Chamber of Commerce

January 7th at 4:40pm Comment (1)