Corporate Taxes: Now’s the Time to Act

By April 26, 2012Taxation

When it comes to tax policy, we couldn’t agree more that This Is No Time For The U.S. To Hesitate On Corporate Tax Reform, an editorial by Walt Galvin, vice chairman of Emerson that appeared in today’s Investors’ Business Daily.  Earlier this month, the United States earned the dubious distinction of having the no.1 corporate tax rate among developed countries, a fact that did not go unnoticed by the Japanese, who previously held the top spot.  As Mr. Galvin notes, Mieko Nakabayashi, a member of Japan’s House of Representatives recently commented on the failure of the United States to address our high corporate tax rate and archaic worldwide tax system and said that the United States “will suffer from that hesitancy while we and others outside the U.S. will benefit.”

While our numero uno tax rate generally grabs the headlines, both Mr. Nakabayashi and Mr. Galvin point out another major problem with our current tax code—a worldwide tax system that subjects income earned by U.S. companies and taxpayers to U.S. tax no matter where the income is earned.  In contrast, our major trading partners, including Japan, have adopted territorial tax systems that only taxes income earned in the home country.

Tax policy plays a critical role in the ability of companies to prosper, compete and create jobs.  In recent years, our trading partners have gotten the message and slashed tax rates and moved to tax systems that encourage global competitiveness. We can’t afford to drag our feet any longer—now’s the time to reform our tax laws, not only for corporations but for businesses of all sizes.

Dorothy Coleman

Dorothy Coleman

Dorothy Coleman is vice president of tax and domestic economic policy at the National Association of Manufacturers (NAM). Ms. Coleman is responsible for providing NAM members with important information related to tax issues and representing the NAM’s position to Congress, the Administration and the media. An NAM spokesperson for tax policy issues, she coordinates membership coalitions; prepares testimony, reports and analyses; and responds to media inquiries. Before taking over as vice president of the tax policy department, she served as director of tax policy from April 1998 to April 2000.
Dorothy Coleman

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