Americans are losing businesses to foreign competitors. Our companies are being punished by a U.S. tax code stuck in the 1970s, and are faced with either moving some operations overseas or being bought by foreign competitors outright.
In the past decade alone, almost 50 companies moved their headquarters outside the U.S. through a business inversion, according to the Congressional Research Service. Those that don’t invert are targets of foreign acquisition.
Companies are being squeezed by the U.S. tax code, with the highest rate and most complexity in the world. Many U.S. corporations with global reach have no choice but to shift their headquarters to a foreign country or risk being bought by foreign firms.
Hillary Clinton and Bernie Sanders think the solution is to tax our companies even more, but U.S. businesses just can’t compete when saddled with the highest corporate tax rate in the industrialized world and a taxation system unique in its global reach of American companies’ income.
More will move their headquarters overseas—or get bought out by foreign companies—so Congress must not delay in reforming the tax code to allow American business to compete.
Congress must fix two key pieces to allow American business to compete, and keep them from moving their headquarters overseas or getting bought by foreign companies:
First, the U.S. must fix the highest corporate income tax rate in the developed world. At 39 percent it is far higher than the average rate in the developed world, which is just 25 percent.
Second, the U.S. must end its worldwide taxation system. We are one of a tiny handful of countries on the globe with a worldwide taxation system, meaning the IRS tries to tax all income, not just income earned in this country, trapping trillions of dollars overseas.