Washington, D. C. – Yesterday, Congressman Tom Emmer (MN-06) introduced the Corporate Rate Equality and Trade Empowerment (CREATE) Jobs Act to make the United States corporate income tax rates internationally competitive.
At 39 percent, the United States has the highest corporate income tax rate in the developed world. Conversely, our international competitors based in countries like China, Canada, Ireland, and the United Kingdom benefit from lower corporate rates.
“The United States is great at a lot of things, but having a competitive tax rate for Minnesotan businesses to thrive is not one of them,” said Emmer. “For years, we have been putting ourselves at a competitive disadvantage – sending jobs, people and tax dollars overseas to countries that have far more business friendly rates. In fact, at least 22 American corporations have already moved overseas since 2012 – two of them being from Minnesota.”
“We can no longer attempt to tax our way into prosperity while forcing the American people to foot the bill” said Emmer. “Instead, we must implement legislation like the CREATE Jobs Act which will help – not hinder – our country’s future by encouraging the creation of more American jobs, increasing our GDP and raising wages for American workers.”
This legislation will ensure the United States remains competitive with foreign corporations by setting our tax rate five percentage points lower than the average Organization for Economic Co-operation & Development (OECD) countries. The OECD is a group of 34 free market western and western-friendly countries who often trade with one another; in effect, these are American’s economic competitors, which is why using their tax rates is a great metric for setting tax rates for the United States. Currently, the average OECD rate is 25 percent, which means under the CREATE Jobs Act the United States corporate income tax rate would be reduced to about 20 percent.
According to the Tax Foundation, reducing the corporate tax rate to 20 percent would create more than 600,000 jobs, increase the GDP by 3.3 percent and raise wages by 2.8 percent over the long-term.
The Corporate Rate Equality and Trade Empowerment (CREATE) Jobs Act is H.R. 4518. Click here to read the full text.