On Taxes, Standing Still Means Falling Behind

By September 25, 2007Taxation

The NAM’s vice president for tax and domestic economic policy, Dorothy B. Coleman, had a letter published in today’s USA Today.

Cut corporate taxes
Dorothy B. Coleman, vice president, Tax and Domestic Economic Policy, National Association of Manufacturers – Washington

USA TODAY’s editorial “Cut corporate tax rates? Not as silly as it sounds” was commendable in highlighting what American manufacturers know firsthand — the harm inflicted on business by U.S. corporate tax rates (Our view, Tax code debate, Sept. 17).

By standing still on taxes, the United States is in effect falling behind, surrendering the global competitive race to the tax cutters in Europe and Asia.

Lower rates are only part of the tax story. Our major trading partners increasingly are vying to capture global research and development because they understand it is a catalyst for economic growth.

Indeed, many of these countries offer both lower tax rates and permanent, generous R&D tax incentives.

America cannot afford to idle while the rest of the world acts: Reducing our corporate tax rates and making a strengthened R&D tax credit permanent would lead to greater economic growth, higher wages for workers, an increase in productivity levels, more business investment and lower inflation.

The NAM’s white paper on taxation is here: “A 21st Century Tax Policy to Promote Job Creation and Economic Growth.”

BTW, according to a working paper by William Randolph at the Congressional Budget Office, slightly more than 70 percent of the burden of corporate taxes fall on workers while about 30 percent hits shareholders.

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