This week, the so-called "Big Six" Republican tax leaders unveiled more of their plan to reform the tax code. As usual, it'll be light on details, but we're told to expect a cut in the corporate income tax rate to 20 percent—as opposed to the 15 percent rate President Donald Trump has promised.
That's unfortunate. With Republicans being the worst negotiators, this rate will only go up once Democrats and the Republicans who behave like Democrats have their say. Even though the United States has the highest corporate tax rate of all developed countries, some lawmakers still believe it's unfair or politically impractical to give corporations tax cuts.
Never mind that a high rate and a worldwide tax system have resulted in massive and legitimate tax avoidance behaviors—such as storing overseas income abroad and transfer pricing—making the return on the corporate tax mediocre. Uncle Sam raises relatively little revenue as a share of gross domestic product from corporations, and less capital is invested at home because trillions of dollars stay abroad, writes Veronique de Rugy in her latest for Reason.