The Reforming America’s Taxes Equitably (RATE) Coalition – whose affiliated companies represent over 30 million employees in all 50 states – today released a letter to members of the Tax Cuts and Jobs Act conference committee on the need to hold steadfast in maintaining the legislation’s globally competitive corporate tax rate of 20 percent.
The letter can be read in its entirety below:
We write to applaud both the House and Senate for seizing this once-in-a-generation opportunity to fix America’s broken tax system – one that punishes job-creating businesses with the highest corporate tax rate in the industrialized world. If enacted, the Tax Cuts and Jobs Act (TCJA) would live up to its name by yielding more jobs and greater investment. Thanks to the historic resolve displayed by Congress, the American people are closer today than any time in the last 31 years.
While it is important to recognize the significance of this historic legislative achievement, we must also stay focused on a fight that is not yet finished – reconciling the differences that exist between the work of the House and the Senate. As such, we must also recognize where the bills align – as is the case with a 20 percent corporate tax rate.
Indeed, as projected by a series of respected economic analyses, the 20 percent rate first charted in the Unified Framework and approved by both chambers of Congress is the key capable of unlocking the great engine of economic growth in America:
- “Reducing the statutory federal corporate tax rate from 35 to 20 percent would…increase average household income in the United States by, very conservatively, $4,000 annually.” (The Council of Economic Advisers, October 16, 2017)
- “…the new Republican tax plan raises GDP by between 3 and 5 percent and real wages by between 4 and 7 percent. This translates into roughly $3,500 annually, on average, per working American household. The source of the increase in U.S. output and real wages is the…reduction in the U.S. marginal effective corporate tax rate…” (Boston University’s Laurence J. Kotlikoff, October 17, 2017)
- “The [TCJA]…would lead to a 3.7 percent increase in GDP over the long term, 2.9 percent higher wages, and an additional 925,000 full-time equivalent jobs.” (Tax Foundation, November 10, 2017)
The achievement of a globally competitive corporate tax rate on a permanent basis would therefore amount to a pronounced edge for American corporations in today’s hyper-competitive marketplace. And with the growing tax burden levied by state and local governments the need for a lower federal rate is more pressing than ever.
To make the most of this once-in-a-generation moment, this fight must be finished with the same resolve that you and your colleagues have shown in getting the TCJA this far. The cause is too critical, and our prospects too promising; we shouldn’t lose sight of our ultimate goal – an America that’s fully competitive with the world.
Preserving a globally competitive rate would halt the steady drip of companies and jobs overseas. According to respected economists it would not only ignite historic economic growth, but also create jobs and boost wages. Which is why leaders from both parties¬–everyone from Barack Obama to Donald Trump–have advocated for it. And it’s why so many companies were willing to give up valuable tax preferences in exchange for a transformational permanent reduction in the corporate rate.
So that’s our urgent message to the conferees: During your whole careers, you might have only this one chance to truly make a difference in the enactment of landmark tax reform – reform that will echo through the annals of American economic policymaking.
So, for the sake of American workers, today and tomorrow, make the most of this historic opportunity. Please hold steadfast in maintaining the greatest possible opportunity for growth, investment and economic opportunity and fight to preserve a globally competitive corporate rate.
The RATE Coalition