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MILLER: Super opportunity for job growth
Congress should use special powers to cut the corporate tax rate
America needs to lower its corporate tax rate. Having the developed world's second most punishing levy just tells job creators that they're better off doing business in one of the 60 countries that have reduced their own taxes in the past few years. Capitol Hill is finally paying attention to this problem.
On Wednesday, House Ways and Means Committee Chairman Dave Camp released a draft international taxation plan that would lower the highest corporate tax rate from 35 to 25 percent and then shift from a worldwide to a territorial system. He said that the goal is to "make it possible for U.S.-based companies doing business worldwide to reinvest in the United States."
By making these two changes, an estimated $1 trillion earned by American companies overseas would be repatriated. "This money that is stranded won't just sit there," the Michigan Republican said. "Eventually they will have to invest it. And they'll invest it there and grow the jobs and the economy there. We'd like to give them the option of investing it here."
The best chance of a domestic corporate tax cut happening this year is from the joint select committee tasked as part of the debt-ceiling deal to come up with deficit reduction. Mr. Camp is a member of this panel, better known as the supercommittee, but he declined to comment on the group's closed-door deliberations.
Congressional sources say the bipartisan, bicameral group has been discussing cutting the corporate tax rate to 25 percent as part of its final recommendations. The supercommittee will have the power to expedite its final legislative package, which only needs a simple majority for passage in the Senate. The provisions cannot be amended in either chamber.
Democrats have been supportive of the rate-lowering concept as long as the corporate tax base is broadened by closing special-interest loopholes, and President Obama has said he would support revenue-neutral tax reform.
However, the left-wing Occupy Wall Street protests make it virtually impossible for the Democratic Senate or Mr. Obama to go along with corporate tax reform through the regular legislative process for fear of upsetting their political base. The supercommittee's final product is expected to contain a mix of sweet and sour items for both parties, providing political cover for Democrats to allow corporate reform to slide through.
Corporate America has embraced the idea even if it means some industries may end up paying more, according to James P. Pinkerton, former White House adviser to Presidents Reagan and George H. W. Bush. Mr. Pinkerton is chairman of the RATE Coalition of 19 businesses and associations pushing to make our tax system more competitive.
"We understand that, on a static basis, that is a revenue loser," he said. "So we're willing to talk about removing loopholes and widening the base." The National Retail Federation, Boeing, Disney, Lockheed Martin and Verizon are all on board. "The tax reform plan that can actually get a majority and can get the signature of the president is really rare," said Mr. Pinkerton. "We think the idea of bringing the U.S. corporate tax rate ... [to] 25 percent - that is doable."
There's reason to doubt whether the supercommittee can come up with real spending cuts - something Congress has never been able to do. There's good reason to hope, however, that its expedited procedures can be used to make the one pro-growth change that could restore America's status as the world's pre-eminent economic superpower.
Emily Miller is a senior editor for the Opinion pages at The Washington Times.
© Copyright 2013 The Washington Times, LLC. Click here for reprint permission.
About the Author
Emily Miller is senior editor of opinion for The Washington Times. She is the author of “Emily Gets Her Gun … But Obama Wants to Take Yours” (Regnery 2013). Miller won the 2012 Clark Mollenhoff Award for Investigative Reporting from the Institute on Political Journalism.
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