U.S. Sen. Dick Lugar (R-IN), marked the March 15 corporate tax filing deadline by underscoring the need to overhaul the U.S. tax code.
"Today is the tax filing deadline for U.S. corporations," Lugar noted. "Among numerous U.S. tax code inefficiencies, our current corporate tax rates drive investment overseas and hinder job creation. Streamlining and lowering corporate taxes is one way that we can incentivize investment in the United States at a time when our country is in need of economic growth and jobs for Americans."
The United States has one of the highest corporate tax rates in the world--35 percent versus the world average of 18.2 percent. This encourages U.S. corporations to shift income and operations to countries with lower corporate tax rates. With Japan expected to lower its corporate tax rate next month, the United States will soon have the highest tax rate in the industrialized world.
A May 2002 U.S. Treasury Department report noted many problems with the U.S. system of corporate taxation. In addition to the erosion of tax revenue that stems from American companies shifting their headquarters abroad, the report said that the current tax system may give foreign-controlled firms a competitive advantage over their American counterparts.
"I believe that policies enacted at every level of government must be geared to create and sustain a positive environment for business growth and job creation," Lugar said. "The cumbersome U.S. tax code needs to be simplified."
Lugar is engaged in efforts to reduce tax rates across the board. In November 2011, he introduced legislation that would extend for another year the bonus depreciation and small business expense deductions, thereby encouraging investment in the United States. The Lugar bill is supported by Americans for Tax Reform and the National Federation of Independent Business, along with a coalition of 77 trade associations, which include the National Association of Manufacturers and the Associated Equipment Distributors.
Additionally, Lugar is a cosponsor and longtime proponent of the FairTax Act, which would abolish the federal income tax and the Internal Revenue Service, along with federal employment taxes, federal inheritance taxes, corporate taxes, and social security taxes. It would replace all these taxes with a single national sales tax on consumer goods and services. Implementation of the FairTax Act would stimulate job-creating economic growth and encourage investment in the American economy.