Robert Luddy, winner of the 2007 Mises Entrepreneurship Award, writes in The News & Observer:
Tax Day is quickly approaching, which means that the absurdity of America’s corporate tax rate is on full display.
At 35 percent, our corporate tax rate is the highest among developed countries. The Land of the Free has a higher corporate tax rate than socialist-run France. This is partially because corporations in this country are looked down upon when, in reality, it’s corporations that play a large role in the creation and flourishing of the middle class. America’s corporate tax code is tough on corporations – and the nation’s workers...
America’s high corporate tax rate leads many companies to invest their money elsewhere. When that happens, job opportunities, real wages and economic growth in our country decline – disproportionately hurting the middle class.
Other nations have realized this and addressed their high corporate tax rates – Japan, Canada and Britain are prime examples – and have reaped economic benefits from doing so. This has left America alone as an outlier, meaning that companies park their profits elsewhere rather than bring them home to improve our economic and fiscal situation...
As a consequence of the status quo, we wind up with “tax inversions” – a technical term to describe a company’s decision to take advantage of lower tax rates in a foreign country by basing its headquarters there. Hit especially hard when this swap takes place are the good-paying jobs at corporate headquarters and the additional jobs they support. Cutting the corporate tax rate would keep more good jobs at home...
