Resolution Urging Congress to Cut the Federal Corporate Tax Rate

Resolution Urging Congress to Cut the Federal Corporate Tax Rate

Summary

This resolution encourages Congress to cut the 35 percent federal corporate tax rate in order to improve the ability of the 50 U.S. states to compete for investment and jobs in the global economy.

Resolution

WHEREAS, the combined United States average federal-state corporate income tax rate is over 39 percent, according to the Organization for Economic Cooperation & Development (OECD), meaning the United States imposes the second-highest overall corporate tax statutory rates in the industrialized world, much higher than the OECD average of 25 percent; and

WHEREAS, effective United States corporate tax rates are out of step with the rest of the world, with studies estimating the United States tax is between 4 percentage points and 17 percentage points higher than the average of other countries, according to a Tax Foundation survey; and

WHEREAS, the federal corporate tax rate of 35 percent undermines the ability of every U.S. state to compete against lower-tax nations such as Canada, China, Great Britain, Ireland, Korea, and Singapore; and

WHEREAS, 75 nations have cut their corporate taxes since 2007, making it increasingly difficult for U.S. states to attract new business investment and jobs; and

WHEREAS, corporate taxes have been identified by the OECD to be the most harmful tax for long-term economic growth by reducing investment, entrepreneurship, productivity, and wages; and

WHEREAS, according to the U.S. Census Bureau, federal corporate income tax collections in 2008 amounted to over $2,000 for every American household, a tax that is borne by every American in the form of lower wages, higher prices, or lower dividends; and

WHEREAS, while many federal officials have identified corporate tax competitiveness as a serious problem, the federal government as of yet has no official policy regarding U.S. tax competitiveness; and

NOW THEREFORE BE IT RESOLVED, that the legislature of the state of {Insert State} urges the United States Congress to cut the federal corporate tax rate.

Approved by the ALEC Board of Directors on September 16, 2011.

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