Cut The Corporate Tax Rate From 35 To 25 Percent
A lower corporate tax rate is essential to U.S. competitiveness.
America was once a low-tax business environment, but as our trade partners
lowered their
rates, America failed to keep pace, leaving us with the second-highest rate
among the world's advanced economies.
Cutting the corporate tax will expand the U.S. economy, creating jobs
and opportunities for prosperity. A recent analysis of tax policy options
estimated that a cut less than half this
size
could increase long-term growth by 0.5 percent, or $100 billion in a single
year.
Lower corporate taxes leads to higher wages. Recent studies
have shown that corporate taxes are in large part passed on to labor through
lower wages. One study noted that a one percent hike in the corporate tax
results in a 0.8 percent decrease in manufacturing wages. Accordingly,
cutting corporate taxes can increase wages for American workers.
Allow First-Year Deduction, Or "Expensing", Of Equipment And
Technology Investments.
Expensing of equipment and technology will provide an immediate
boost to capital expenditures and reward investments in cutting-edge
technologies.
The additional investment stimulated by a change to expensing of
equipment and technology will drive to economic growth. A recent estimate of
a modest expensing provision predicted a gain of 1.5 percent in long term
economic growth.
The complexity of our tax code needlessly burdens American
businesses and families with $140 billion in compliance costs. Allowing
expensing will eliminate the need for complicated accounting for
depreciation.
Establish Permanent Tax Credit Equal To 10 Percent Of Wages
Spent On R&D.
The R&D tax credit will simplify the tax code, reward activity in
the United States, and make us more competitive with other countries.
A permanent credit will provide an incentive to innovate and
remove uncertainty. At a time when our companies need to be more
competitive, we need to
provide a permanent incentive to innovate, and remove the uncertainty now
hanging over businesses as they make R&D investment decisions.
These Are Essential First Steps On The Path To Fundamental Tax
Reform, Which Could Increase U.S. GDP By As Much As 10 Percent Over The Long
Term.
