Following is a statement from Alan Essig, executive director of the Institute on Taxation and Economic Policy, regarding the House Ways and Means Committee hearing on tax reform. The hearing, scheduled for 10 a.m. today, will feature testimony from Fortune 500 executives.
“If the lineup for today’s House Ways and Means Committee hearing on tax reform is an indication of how the tax policy debate will unfold in the coming months, businesses and their lobbyists will have outsize influence in the process. This is a mistake.
“Corporations and their lobbyists continue to muddy the waters regarding the taxes they pay, claiming corporate taxes are too high and businesses don’t have a competitive edge. While it is true the United States has the world’s highest statutory corporate tax rate at 35 percent, the average effective tax rate paid by profitable corporations is 21.2 percent—a rate on par and competitive with most other developed nations. U.S. corporate tax collection as a percent of GDP is nearly 25 percent below the average for all OECD countries. Further, corporations continue to take advantage of copious loopholes, and some companies shield a significant percent of their profits from taxes altogether.
“Corporate tax policy changes that cut the corporate tax rate without also closing loopholes and raising revenue should be a non-starter for tax reform.
“Congress and President Trump are touting tax reform as a way to grow the economy and create jobs. But so far congressional tax proposals and the president’s tax sketch have focused on tax cuts that largely benefit corporations and the wealthy with fantastical promises of how these supply-side economic policies will benefit ordinary, working people.
“Corporations are beholden to shareholders and members of Congress are beholden to the public. Too much is at stake to allow the former to shape this generation’s biggest tax reform debate.”