Bush: No Proposal to Cut Corporate Taxes

By August 9, 2007Taxation

Blah. From Washington Post columnist Dan Froomkin.

President Bush said today that he is not considering cutting corporate taxes — but rather is beginning to mull over a proposal that would simplify IRS rules for corporations while not reducing their overall tax burden.

At a surprise press conference this morning, Bush disputed the impression left by a Washington Post report that he was considering a plan to cut corporate tax rates. “If you read carefully the penetrating report,” he said, “[I] made it clear that we’re at the very early stages of discussion and that in my own judgment, anything that would be submitted to Congress, if submitted at all, would have to be revenue-neutral. And therefore what we’d really be talking about is a simplification of a very complex tax code that might be able to lower rates and at the same time simplify the code, which is like shorthand for certain deductions would be taken away.”

Here is the transcript of the press conference. And here (exclusively on the Internet) is the transcript of Bush’s roundtable discussion with reporters yesterday, upon which The Post story was based.

If so, too, too bad — a position we’ll work to change. Once again it’s worth turning to the Tax Foundation’s review of OECD tax rates released last month.

Washington, DC, July 24, 2007 – The U.S. has the second-highest corporate tax rate in the OECD and is one of only two countries that have not reduced their rates since 1994, according to a new review of international tax rates by the Tax Foundation.

Five countries cut their corporate income tax rates in 2006, seven more will have cut their rates by the end of this year, and Germany recently announced a planned cut on January 1, 2008.

Despite its high corporate tax rate, the U.S. collects less revenue as a percentage of GDP than most other OECD countries, even those with much lower statutory tax rates,” said Chris Atkins, senior tax counsel and co-author of the new study. “The United States is one of only two OECD countries not to cut corporate tax rates in the past 12 years. That has pushed us further and further behind in a highly competitive international marketplace.”

Simplification is all well and good, but it does not address the underlying competitive disadvantage being created by U.S. corporate taxes.

Leave a Reply