Here at the NAM, we’re getting more and more anxious about the impact of our high corporate tax rates on the ability of U.S. manufacturers to compete in the global marketplace. We’d like to see the U.S. government follow the lead of our trading partners and lower the federal statutory rate down to 25 percent or lower.
It looks like Treasury Secretary Hank Paulson shares our concern that, by standing still, we are falling behind. According to BNA’s Daily Tax Report (subscription only), in comments yesterday to the Senate Budget Committee, Secretary Paulson noted that while corporate rates were lower in the 1980s than in the 1970s, they have been creeping up since, relative to international competitors. “The direction of change is what I find alarming,” he told budgeteers.
While the Secretary didn’t endorse a specific solution to the problem, he did suggest one possibility that appeals to us—reducing the rates and simplifying the system. He commented that “the whole momentum” of tax policy has been going away from simplification. We couldn’t agree more.
(Paulson’s opening statement is here.)