Were you thinking that corporate tax reform seemed like a potentially bipartisan issue that could actually get accomplished in the last year of the Obama administration? Elizabeth Warren is here to scuttle that dream.
Here’s the problem with our corporate tax code in a nutshell: We have the highest corporate tax rate in the developed world and our convoluted system imposes a tax on every dollar a corporation earns, no matter where it is earned. That means that U.S. corporations keep trillions of dollars parked overseas rather than returning it to the United States.
While attempts to get a wholesale reform of the tax code have gone nowhere, members on both sides of the aisle have been exploring a corporate-only tax reform that would reduce the corporate tax rate and alter how we tax foreign sourced income while getting rid of many of the tax preferences in the code. Such a reform would result in more domestic investment and job creation, higher economic growth, and little or no lost revenue.
Who could be against that? Elizabeth Warren, of course.
In a speech at the National Press Club this week, Warren pronounced that the real problem with the corporate tax is that it doesn’t collect enough revenue, and that if anything we ought to be raising the rate.
Set aside the fact that the corporate tax rate isn’t terribly progressive to begin with, given that a CBO study estimates that the bulk of the corporate income tax is paid by workers in the form of lower wages. The real problem with her diatribe is that she felt obligated to sabotage on one of the few bipartisan agreements that seem to be possible in the next year by employing the same stale rhetoric that the lefty blogs fall on when they run out of coherent arguments to use on corporate taxes.
Why Warren gets respect for her thoughtful posturing when her actions are indistinguishable from Ted Cruz is beyond me.
Ike Brannon is president of Capital Policy Analytics, a consulting firm in Washington.
