With the presidential field continuing to narrow, the timeliness of the candidate’s plans for tax reform is becoming increasingly important. We can’t be content with policies that drive American companies to invert overseas, and we need our leaders to set a clear timeline for fixing this. The first 100 days in office sets the tone of an administration, and lowering the corporate rate should be a part of that agenda.
Companies invert overseas because other countries offer lower corporate tax rates. It’s a simple economic incentive that highlights the fact that the United States is painfully behind when it comes to creating a competitive business climate. Some candidates want to address this retroactively by pressuring congress to punish companies that move their operations overseas. The knee-jerk reaction to punish them is tempting considering the very real concerns of American workers.
Realistically though, that plan doesn’t address the root of the problem. This solution would only be treating the symptoms of corporate inversion. We need to actually treat the underlying reason why American businesses are leaving in the first place. By setting a more competitive business tax rate which is often twice that of other modern economies, we can not only stop companies from leaving, but attract new ones here.
Every presidential candidate has laid out their plan to reform our tax code, now is the time to tell voters how and when they plan to get the job done should they be elected.