I am convinced that the average American voter has there own personal “litmus test” for each candidate in any election. There is a short list of major issues that the voter has developed over time based upon their own personal interests, and each candidate stands or falls based on their agreement with the voter on these limited issues. Perhaps that is the case with many of the readers of this site, what I’d like to do with this short article is perhaps add another issue to your personal litmus test. What issue would I find important enough to write about today? The Corporate Tax rate.
I know, it’s the most interesting topic in the world! Also, I am sure most of you are directly affected by this… well, probably not.
Give me a second to tell you why you should care, deeply care, about the corporate tax rate. Over the last ten years we have seen a companies flocking to “greener” shores, searching for locales that will prove to be a boon financially. The reasons for this may be slightly varied but in the end always come down to the bottom line, how can we maximize profits? Our country’s corporate tax rate is the highest in the world, and while most every company doesn’t actually pay the assigned corporate rate they can still save millions by moving offshore. Companies must consider how effective a move might be, because while every industrialized nation in the world has a lower tax rate, the actual taxes paid will not be less in all (because of incentives, tax breaks, and other features) of the countries. However, there are a handful of countries where corporations can save a lot of money every year, and all of that helps the bottom line.
Here is where the corporate tax rate and it’s effect on our companies affects you… jobs, jobs, jobs. If companies continue to leave our shores in droves, they will keep taking the jobs that American need with them. Maybe for one company it’s only one hundred factory jobs, but for another it could a thousand, or ten thousand – we must stop the massive migration of our businesses over seas. The best way to ensure our company’s stay here (and that we attract new companies from overseas) is by lowering the corporate tax rate. By offering companies the best opportunity to make the most money we can ensure American competitiveness in the international market, and we can ensure continued growth of our economy as well. There are of course, other avenues of action that we could (and should) take to continue to incentivize business in America – but the corporate tax rate is the quickest best way to show American business that we mean business.