Opinion: Morning Examiner

Slashing corporate taxes is a prerequisite for stopping crony capitalism

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Beltway Confidential,Opinion,Mark Tapscott,Morning Examiner,Taxes,Corporate Welfare,Capitalism,Cronyism

Jared Meyer of the Manhattan Institute asks an interesting question today: "America is performing well in the Sochi Olympics, but how would the medal count differ if countries competed on taxes rather than winter sports?"

The answer is, in a word, terrible. Meyer explains: "In a competition based on corporate tax rates, the United States would come in last out of the 34 Organization for Economic Co-operation and Development countries."

Put another way, comparing the U.S. tax burden with those of other major industrialized nations of the world suggests they've been going one direction while America has headed the opposite direction.

Look who's up

The figures compiled by Meyer are stark: "Taking state and federal taxes into account, the U.S. top rate is 39 percent -- 50 percent higher than the OECD average and triple Ireland's gold medal-winning rate of 12.5 percent."

Meyer notes that America's taxes have increased steadily since the 1980s, while the average for the other industrialized nations declined more than 40 percent.

"Apparently America missed the memo to drastically lower corporate tax rates in order to attract businesses," Meyer observes.

Okay, so what?

Why should anyone care? Because, besides slowing economic growth, discouraging innovation and reducing standards of living, Meyer points to an unintended consequence of high taxes that gets too little attention:

"Lower corporate tax rates can also weaken the connection between Big Business and Washington. When everyone — not just the companies that can afford the legal and accounting fees to navigate the current system — is paying a lower rate, competition would move to the marketplace instead of Capitol Hill."

In other words, those who seek less crony capitalism, corporate welfare and government regulation should make lowering corporate taxes a top priority. Meyer's op-ed merits close reading.

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