It has been more than 30 years since policymakers reformed the federal tax code. And since that time, high marginal tax rates for businesses have discouraged investment and encouraged profit shifting.
Even when accounting for credits and deductions, the Congressional Budget Office’s research has shown the U.S. imposes high business taxes compared to competing nations.
Comprehensive tax reform could lower these rates, simplify the code and jump-start economic growth. Whether lawmakers prefer the House GOP plan or another option, simply cutting rates will not fix the problem. Reform is politically difficult, but the economic benefits are worth it.