Let’s face a hard truth: Right now, foreign companies don’t want to become American companies. What’s worse, American companies are leaving to become foreign companies. It should be the other way around.
There are number of reasons for this, but a big one is that we have the worst corporate tax system in the industrialized world.
U.S.-based corporations pay a tax rate of 35 percent, and successful small businesses pay a top marginal tax rate of 44.6 percent. Compare that to 15 percent corporations in Canada pay, or the global average of 22.5 percent, and the problem is clear as day. The above chart demonstrates that, while most advanced economies have lowered their corporate tax rates over time, the United States has largely maintained the same antiquated system. As a result, we have fallen behind our foreign competitors.
How can we compete like that?
In his recent speech to the National Association of Manufacturers, Speaker Ryan talked about how commonsense reforms to our tax system can stop the drain of American businesses overseas:
“Real tax reform means slashing our corporate tax rate as low as possible. This means eliminating special-interest carve-outs and replacing them with lower tax rates for all businesses. And this means creating a new, lower tax, specifically for small businesses, so they can compete fairly, on a level playing field.
"There is one last piece to this puzzle, and it goes back to the idea that all of this is about looking down the road, and planning for the future. These reforms—these tax cuts—they need to be permanent.”
Today, our international tax code ranks 31st out of 35 Organisation for Economic and Development countries. The nonpartisan Tax Foundation estimates that these reforms would leapfrog our tax system from the 31st least competitive to the 3rd most competitive
Tax reform won’t be easy. Changing the status quo never is. But we need to get this done for American workers, families, and businesses. A confident America means being able to say that we are truly the Land of Opportunity.
To learn more, visit speaker.gov or check out the links below:
Here's Why Tax Cuts Must Be Permanent:
Top 5 Moments from Speaker Ryan’s First Major Tax Speech
Speaker Ryan on Tax Reform: 'We are going to get this done in 2017'
Full Text: Speaker Ryan's First Major Speech on Tax Reform
Four Things Before Today's Tax Reform Speech
Tax Reform: More Jobs, Higher Wages, and Renewed Confidence