For decades, the United States had an uncompetitive tax code that disadvantaged workers and businesses. The outdated U.S. international tax system and high corporate income tax rate were major roadblocks to economic growth. Because of an uncompetitive tax code, the U.S. lost 4,700 companies from 2004 to 2016.
Thanks to tax reform, our tax code is no longer an economic impediment. The tax law includes:
- A corporate income tax rate that is competitive with the rest of the developed world,
- A territorial-type international tax system that incentivizes companies to invest in the U.S., and
- Tax relief for American families.
Tax reform aligned the U.S. corporate tax rate with global competitors and halted the out-migration of U.S. companies to low-tax countries. We must ensure our corporate rate stays competitive — allowing the U.S. to be leader in the increasingly competitive, globalized marketplace against competitors, like China, who prioritize economic growth.
The 2017 tax reforms that restored a competitive tax system for the United States stimulated the economy, and the country enjoyed a historically strong period of economic growth. The unemployment rate dropped to a 50-year low, the lowest-paid workers enjoyed a higher median wage growth than workers overall, personal income grew by about $5,000 per household, and business investment in our country expanded. Business leaders were able to strengthen investments in their workforce and communities through training and education programs and philanthropic efforts.
Strong headway has been made, but we cannot risk hindering our progress. In addition to extending the 2017 tax reforms, policymakers should also restore important provisions that have already expired, including immediate expensing for research and development investments.