Hillary Opposes Lowering the Corporate Tax Rate, Says Top Advisor
Hillary Clinton would oppose lowering the corporate tax rate as President, a top advisor suggested. This position puts the campaign far outside the mainstream of both Democrats and Republicans including President Barack Obama and Speaker Paul Ryan who have called for lowering the 35 percent federal income tax rate to a more globally competitive rate.
As reported Thursday by PoliticoPro, Clinton advisor Neera Tanden suggested that Hillary would oppose any effort to lower the corporate income tax rate. Tanden argued that “the U.S. has been doing pretty well when it comes to competitiveness."
Hillary’s refusal to endorse lower tax rates puts her at odds with her fellow Democrats that have called for lowering business tax rates. In past budget proposals, President Obama has called for lowering the corporate tax rate from 35 percent to 28 percent. Similarly, Finance Committee Ranking Member Ron Wyden (D-Ore.) proposed lowering the corporate tax rate to 24 percent in his tax reform plan.
The Trump tax plan calls for lowering the corporate rate to 15 percent, while the House Republican blueprint proposes lowering the rate to 20 percent. Like Clinton, other Democrat plans propose a net tax increase, while Republican plans all call for a net tax cut.
Chart by Strategas Research Partners using Tax Foundation and OECD data
Lowering the corporate tax rate has broad, bipartisan support because the U.S. has the highest rates in the developed world. At more than 39 percent, our business taxes far exceeds the developed average of 25 percent, not to mention competitors like Canada (26.3 percent), the United Kingdom (20 percent), and Ireland (12.5 percent).
As a result, our businesses cannot compete with those in the rest of the world. Close to 50 American businesses have left the country through an inversion in the past decade, according to data compiled by Democrats on the Ways and Means Committee. America has also lost an additional $179 billion worth of assets through acquisitions by foreign competitors, according to a report by Ernst and Young.
American business tax rates have not changed since tax reform was passed 30 years ago in 1986. At the time, we lowered our rate to 39 percent – below the developed average of 44 percent. Since then, other countries have cut their rates aggressively. 31 of the 34 OECD countries have reduced their corporate rates since 2000. Only the U.S. and Chile have higher corporate tax rates than they did in 2000.
Rather than reduce the extremely high, uncompetitive corporate tax rate, Clinton has proposed a series of measures aimed at inversions including an “exit tax” on income earned overseas. The term “exit tax” is used by the campaign itself. Her campaign document describing this proposal says it will raise $80 billion in tax revenue, but claims some of the $80 billion will be plowed into tax relief. How much? The campaign doesn't say.
In all, Hillary has formally proposed $1 trillion net tax increase including a $350 billion income tax increase, a $275 billion business tax increase, and $400 billion in “fairness taxes.”
The campaign has also called for capital gains tax increases and a tax on stock trading. Her campaign has failed to release specific details on these proposals so the true Clinton net tax hike figure is likely much higher than $1 trillion.
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Finish us off in what Obama began.
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