WASHINGTON (March 24, 2014) - Over the past two decades other nations have steadily lowered their corporate tax rates to the point where the United States now has the highest statutory rate in the world. In addition, we also have very high effective rates relative to our competitors, and, unlike most nations, we tax companies on world-wide income. To top it off, America ranks 27th in the generosity of our research and development tax credit. This environment puts American companies at a global competitive disadvantage and disincentives business investment in the U.S., hampering economic and job growth in the process.
To better explain the impact of corporate taxes on investment and competitiveness and present a comprehensive plan for reform, the Information Technology and Innovation Foundation (ITIF) has released Assessing U.S. Corporate Tax Reform in an Age of Global Competition. The report argues that to better align corporate tax policy for competitiveness and growth we must lower the effective as well as the statutory tax rate while also expanding tax incentives for investment.
"The U.S. is in a race for global economic advantage and other nations are using their tax code to attract and retain investment," says Joe Kennedy, Senior Fellow with ITIF and author of the report. "Unfortunately, the U.S. corporate tax system impedes instead of drives growth and reform is urgently required if we want to address our stagnant economic performance."
Reforms presented in the report include lowering the statutory rate an