Corporate Tax Reform Encourages Businesses to Invest and Create Jobs (Blue Dog Research Forum)

By Rep. Loretta Sanchez

As we move further into this new decade, our country must also move forward with reforms that encourage businesses to invest and create jobs in America. As a Californian, it has always been my goal to create an environment where businesses are competitive and able to foster innovation. One of the most important steps Congress can take to continue that innovation and growth environment is to reexamine our corporate tax structure.  

The United States corporate tax rates are some of the highest in the world. At  35 percent, our tax rates rival Japan as the most onerous to foreign investment. In fact, this rate has proven to be uncompetitive to both attracting foreign investment in the United States and investment at home by US companies. Our current tax rate  makes setting up a business in the United States very unappealing to corporations abroad, and corporations currently located in the United States must choose between either paying this rate, or investing their businesses overseas with countries that have much friendlier tax rates.

We must continue to make America the place where innovation starts and companies grow. Congress must make fixing the barriers to international competitiveness for American corporations in our global economy a high priority and I am working with my colleagues to pass meaningful corporate tax reform. Recently, former President Clinton suggested we lower the rate to roughly 25%, but we must not risk raising other taxes, such as capital gains, as offsets that are crucial to entrepreneurship and America’s ability to invest in startups. I suggest lowering these tax rates and simplifying the tax code by removing unneeded, inefficient or outdated tax cuts or credits such as those to subsidize ethanol production or tax breaks for the wealthiest Americans. This will make any reform more affordable and likely to pass Congress. Successful corporate tax reform, supported by both parties, would go a long way towards restoring cohesiveness and bipartisanship in Washington.

Lowering the corporate tax rate would put us on the right path to long term recovery and send a strong signal to the American business community to invest in America once again. I urge my colleagues to consider this proposal to increase United States’ competitiveness around the world.