By: Dr. Lynn Reaser
Tax reform might be a difficult topic to tackle in 2015, but Congress should start the process. Corporate tax reform should be the primary focus as companies are the principal drivers of jobs and economic growth.
If the U.S. is going to be globally competitive, we need to have a tax system that is consistent with other major countries. This means that our system should be changed so that companies only pay taxes in the country where they are earned (called a “territorial” system of taxation). Today, U.S. companies must pay a high 35% tax rate on all profits regardless of where they are earned, encouraging firms to move their operations abroad and keep their cash overseas.
If we want to boost our long-term growth potential and standards of living, it is critical to put the right incentives in place.
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