Mike Lee calls for elimination to corporate taxes
Utah’s Republican senator, Mike Lee, on Monday proposed eliminating corporate taxes to protect U.S. workers from offshoring, as an alternative to the House GOP plan to border-adjust taxes.
Lee, writing in the publication the Federalist, suggested lowering the U.S. statutory corporate tax rate to zero while hiking the tax on dividends to 39.6 percent, in order to shift the burden of corporate taxation from workers to investors.
Lee called the idea a “much simpler, and more powerful, tax reform framework that would put ‘America first'” and “put the forces of globalization, even global elites themselves, to work for American workers, instead of the other way around.”
“consider exactly how capitalism and globalization work. Capitalism succeeds largely by aligning the interests of people who might otherwise be adversaries—buyers and sellers, employers and employees, bankers and borrowers, etc.,” Lee explains. “Consider specifically how capitalism makes partners of (forgive the overly simplistic terms) “rich” people and “not-rich” people in forming businesses. Rich people with money to invest join with not-rich people who have labor to sell. Together, they help each other, their families and neighbors, their countries, and the world. It’s win-win.”
President Trump this month commented that the House plan might be too complicated, and Lee agreed with that criticism in his op-ed. “I’m not sure I love border adjustment,” he wrote.
Lee has pushed for several years for radical simplification of the corporate tax code, and the integration of both corporate-level and investor-level taxes.
A previous blueprint he wrote with Sen. Marco Rubio of Florida, which Rubio featured in his presidential campaign, would have set the single integrated corporate tax rate at 25 percent.
Today, corporate income is taxed at 35 percent and dividends and capital gains are taxed at up to 23.8 percent.
“So, what would a tax system that puts American workers first look like? It would start with a cut in the federal corporate tax rate. Not to 25 percent or 15 percent, but to zero. Eliminate it altogether.”
Lee adds: “lost revenue could be recouped, at least in part, by raising the tax rates on capital gains and dividends. That’s step two. Taken together, these two changes would transfer the workers’ share of the corporate tax onto American investors, who, again, are the natural and disproportionate beneficiaries of globalization relative to American workers.”
Read all of Lee’s post HERE