The corporate tax rate for American companies still stands at 39% if you include taxes at the state level — we still have the dubious distinction of leading the world when it comes to the highest business tax rates.
BUT FIRST – HAPPY ST. PATRICK’S DAY TO YOU. This Guinness is on us!
The Rate in Sharper Focus — Spencer Woody of National Taxpayers Union Foundation authored a must-read piece in response to the last week’s misleading study put out by the Institute on Taxation and Economic Policy (ITEP) claiming that while the statutory corporate tax rate is 35%, American corporations used tax loopholes to lower their effective tax rate to 21.2% between 2008 and 2015. As Mr. Woody points out however, the data points and time frame used do not paint a fair picture of the corporate tax landscape. BTW – RATE member companies pay an average effective tax rate of 32%.
Bill by August? – Roger Russell at Accounting Today reports that a tax reform bill could very well hit President Trump’s desk by August. His source? Former congressman and U.S. Senate candidate Rick Lazio. Lazio, who is now senior vice president of alliantgroup, made the prediction despite the enormous amount of legislative action on the horizon. One of the reasons the emphasis is on getting tax reform “done” by the August recess is that political capital is optimal in a president’s first year in office, according to Lazio.
CBO Confirms: U.S. Corporate Tax Rate Highest in the World: The Congressional Budget Office rang the warning bell again in a study released last Friday. Here is what the RATE Coalition had to say in response:
As the CBO confirmed it again today: the U.S. corporate tax rate is the highest in the world. This is not a surprise. For years, the RATE Coalition has shined a spotlight on the economic problems that have befallen America because of this dubious distinction. These problems include stagnant growth, flat wages for most workers, companies moving their operations and headquarters overseas, and a declining tax base as those companies seek to find a more favorable tax climate.
We are now at a critical juncture in the long road to fixing the corporate rate. Congressional majorities in both the House and the Senate are contemplating how best to move forward on President Trump’s promise to reduce the corporate tax rate and to make America a great place to do business again.
American companies paying the world’s highest rate and have faced the ill-effects that flow from it. As the Congress proceeds on its efforts, the RATE Coalition and its member company employees will continue to press policy makers to make fixing the corporate tax rate the centerpiece of reform. Real tax reform starts with the rate. That is our message and our mission.
A Small Business Op-Ed Worth Reading: The Washington Examiner shared the story of Rebecca Boenigk, CEO of Neutral Posture, a family-owned business based in Bryan, Texas. Her message: Pass tax reform to empower American businesses and workers. Rebecca rightly concludes that the 35 percent rate the U.S. imposes on businesses is one of the highest in the world. Cutting that rate to 20 percent, and applying it more evenhandedly to companies both large and small, would give entrepreneurs the capital they need to invest profits back into our businesses, increase output, and hire more workers.
Across The Pond: Bloomberg reports that the U.K.’s corporate tax allure outweighs Brexit concerns. This rosy outlook on the post-Brexit situation comes from the founder and chief executive of staffing and outsourcing business Robert Walters Plc. His core evidence: the U.K. is committed to lowering the corporate rate from 20 percent to 17 percent by 2020.
WE WANT TO KNOW: Can the 115th Congress and President Trump successfully tackle Tax Reform in 2017? Log on to our Facebook page and let us know what you think!
AND, REMEMBER THE RATE PLAN: Set the corporate tax rate at a globally competitive level, close tax loopholes, keep American companies in America, and enable the U.S. economy to grow resulting in a higher standard of living for American workers. REAL TAX REFORM STARTS WITH THE RATE