Congress is finally tackling the tax code, which is good news because reform is badly needed. Our outdated code is complicated by thousands of credits, deductions and exemptions to individual and corporate interests—and it imposes high rates that inhibit economic growth. However, as we’ve seen with the failed efforts to repeal and replace Obamacare, getting a consensus among Republican members is easier said than done. It should boil down to three priorities.
First, though overhauling the whole tax code would be great, if the goal is economic growth, reforming the corporate side is the most pressing priority. Everyone knows that the corporate tax system is a punishingly inefficient and large driver of corporate avoidance. Ideally, a reform plan could cut the rate dramatically and move the United States from the highest to one of the lowest rates among industrialized nations. The president has talked about 15 percent, which would make U.S. companies significantly more competitive abroad and at home while dramatically reducing the need for tax avoidance and inversions, writes Veronique de Rugy in her latest for Reason.
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