202-224-4515, Katie Niederee and Julia Lawless
Bring Businesses Home to Boost Middle-Class Wages
High Corporate Tax Rate Costs American Workers Thousands Each Year
This fall, the Senate Finance Committee took a deep dive into examining effective policy solutions to make the United States a more inviting place to do business.
The committee discussed lowering the corporate tax rate, boosting expensing, and shifting to a territorial tax system with measures designed to protect the tax base – among a variety of other proposals – during several tax reform hearings as ways to help turn the economic tide and provide more opportunity for all Americans.
As Chairman Orrin Hatch (R-Utah) recently said, “Our chief goals, particularly in business tax reform, are to increase economic growth, create new jobs, grow wages for the employees of both large and small businesses, expand opportunities for all Americans, and improve standards of living for everyone in the United States.”
This is critical given that studies often show current tax law runs counter to the goal of growth.
Recent analysis by the National Retail Federation (NRF), found that “…high corporate tax rates push down the wages of the average corporate worker by as much as $4,690 a year.”
And, the non-partisan Congressional Budget Office (CBO) just last month estimated that U.S. corporate tax receipts will see a 2.5 percent reduction by 2027 if American companies continue to “invert” and locate their headquarters in a lower-tax jurisdiction.
A senior liberal Senator perhaps put it best, saying, “When you see that kind of exodus or mass bolting out of the country for lower taxes, it is going to mean a sharp reduction in federal revenue, which means that the middle-class pays more.”
The good news is there is a unified effort in Congress to remake the tax code to help produce more jobs, fairer taxes and bigger paychecks for more Americans.
And, thanks to further analysis in recent hearings at the Senate Finance Committee, it’s clear that changes to the business and international side of the tax code will help increase wages for middle-class workers and prevent more jobs and capital from being shipped overseas.
And, the data are there to back it up.
Even more, a recent study by Business Roundtable found that a globally competitive U.S. corporate tax rate of around 20 percent, “…would have kept 4,700 companies in the United States from 2004 to 2016.”
Bottom line: The comprehensive tax reform effort underway in Congress will make the United States a more inviting place to invest, do business, keep jobs at home, and boost wages for American workers across the country.
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