US Corporate Income Tax Reduction - The Catalyst for a Strong Economy

Time to elect a Congress willing to cut US Corporate Income Tax, which would boost our economy and encourage a return of jobs and prosperity to America!

High Corporate Income Tax rates discourage business activity in the affected areas. The US rates are the second highest in the world without state taxes included. Some states (mostly northern) actually top the world list.

Country	Tax Rate %
24 US States	39.6-41.6
Japan	39.54
13 US States	38.9-39.5
Germany	38.9
9 US States	37.8-38.6
Canada	36.1
4 US States	35-36
France	34.4
...	...
Ireland	12.5

Information referenced for Corporate Income Tax comparisons from the TaxFoundation.org.

The Tax Foundation lists 30 countries, but FlipCongress2010 investigations of additional countries within Asia, Africa, South America, and the Middle East indicated corporate income tax rates from 20-35% range leaving the US as the high point and Ireland as the most business friendly.

The Current Congressional Economic Plan for job growth… Sadly Unworkable

Create jobs by increasing the size of government and government sponsored programs.

This weak, quicksand, plan built upon non-productive, government subsidized, employment assures further degradation of our economic and job outlook as taxes rise and businesses leave the US.

An Economic Plan With a Future

Decrease US corporate income tax by several percentage points immediately. Charlie Rangel of NY and John McCain of AZ have both recently expressed interest in decreasing the tax rate.
Eliminate loopholes/deductions immediately. Rangel and McCain have also expressed interest in implementing some reductions in loopholes. Note: Impossible to fully implement until enough new legislators who are not owned by special interest groups are elected by the people.
The key, the make-or-break part of the plan: Legislate a gradual yearly decrease in US corporate income tax until target is met.
For example: If the rates after item one were 15% on $0-250,000 income and 28% over $250,000 income; the decrease could be set at 1% per year for $0-250,000 and 2% per year for over $250,000 for each of the next 5 or 6 years. At that point, the US corporate income tax level would remain stable and competitive enough to entice even foreign owned businesses into the US. The rate drop should be gradual in order to avoid any sharp tax revenue decreases before businesses have been able to complete the shift back into the US.

The corporate income tax rate must drop below 20% (ideally 10-15% range) for the US to be a contender in the world competition for business. If implemented properly, we could reasonably expect equivalent or increased revenue from corporate taxes and sharp expansion of US employment.

What About Temporary US Corporate Income Tax Reductions?

Temporary income tax reductions have been shown to be effective economically over the short term. In 2004 Congress passed the American Jobs Creation Act which offered a one year 5.25% corporate rate for “repatriated” income (revenue moved back into the US from foreign operations). The government enjoyed a $19 Billion increase in tax revenue from businesses in 2005 due to the Act and the economy enjoyed a 9.6% increase in business investment in the US. (Numbers from a 7/1/08 Wall Street Journal Editorial Article).

However, temporary tax breaks only affect businesses already located in the US because no company would consider relocating to the US for a temporary tax break.

The permanent US corporate income tax rate must be tempting enough to encourage corporate relocations which are the key to permanently boosting jobs and the economy.