America has the highest corporate tax rate in the industrialized world, at 35 percent.
The only country with a higher rate is the United Arab Emirates, at 55 percent, but a country so dependent on oil doesn’t have to worry about the competitiveness of its other industries.
Perennial economic powerhouse Hong Kong has a rate of just 16.5 percent. Even Communist China’s rate is 10 percentage points lower than ours, at 25 percent.
President Trump knows that to keep his promise to “Make America Great Again,” he has to preside over some real economic growth. And one of the best ways to do that is to lower the taxes that employers pay.
Then again, as I pointed out in an editorial last Wednesday, corporations don’t pay taxes, no matter what the corporate tax rate is. Never have. Never will. [Nov. 1, “It’s Workers Who Pay Corporate Taxes”].
“That’s because corporations always pass taxes along to someone else,” the editorial continued. “They either charge customers more or they pay employees less. Yes, in some cases they may also pay shareholders less. But who do you think shareholders are? In many cases, they are people who have some of their savings invested in retirement accounts.”
I left out one other important way employers pass taxes along to others: By simply hiring fewer people.
There’s not a credible economist in the world who would argue that corporate taxes don’t hinder economic growth.
So, the president has called for lowering the U.S. corporate tax rate to 20 percent.
But because Donald Trump is for it, his critics have to be against it even if they were for it earlier.
Consider Chuck Schumer of New York, the Democratic leader in the Senate.
Last year he said during a committee hearing on cutting corporate taxes: “I’m game to do it because I think it’s really important for American competitiveness.”
But now that President Trump is pushing the same idea, Sen. Schumer says, “the cut in the corporate rate would hardly help the everyday American worker. This is trickle-down.”
And Rep. Nancy Pelosi, the Democratic leader in the House, issued a press release in 2016 saying, “It is long past time for tax reform that would lower the corporate rate.”
But she said at a recent press conference that “Republicans are ‘deceptively, misleadingly say[ing] to the American people’ that ‘cutting the taxes of corporate America is going to produce such growth that it will eliminate that increase in the debt.’” Even former President Barack Obama proposed a corporate tax cut in his fiscal year 2016 budget, saying it was needed for “putting the United States in line with major competitor countries and encouraging greater investment here at home.”
Emily Miller, writing for the conservative website The Daily Signal, cited an analysis by the Council of Economic Advisers, which found that the Trump corporate tax cut would increase the average household income by $4,000 to $9,000 a year.
It’s time for lawmakers to do what’s right for the country and quit worrying about whose idea it is.
All of us at The Daily Record hope you enjoy the special Veterans Day tribute magazine that appears today in all our subscribers’ copies. And if you’re not a subscriber, you can come by our place at 99 W. Broad St. and pick one up.
This is something we look forward to repeating each year, and we anticipate the book growing as more people send us photos of the veterans who are close to them.
Contact Bart Adams at (910) 230-2001 or email@example.com.