Simply put, the federal tax code is broken. It's arcane and was last reformed in 1986. We can probably all brainstorm a few things that should have remained in the 1980s, and our current tax code is one of them.
American businesses shouldn't be held back by a tax code that was written for the 20th century, as both technology and the competitive nature of the international market have evolved beyond the foresight of the reforms made in 1986. It's time to have a tax code for the 21st century.
From having the highest business tax rate in the world to our tax code's tremendously complex piles of paperwork both individuals and companies have to sort through, our tax system hampers American prosperity instead of promoting opportunity, investment and economic growth.
While we have been so close from time to time over the past 30 years to reforming our tax code, we've always fallen short. Instead of charging forward with plans to implement actual tax reform, we've settled for piecemeal revisions that help in the short run but eventually just add a new layer of complexity to the tax code.
It's time for that to change, and I'm hopeful a president who brings business experience to the White House can convince leaders in Washington, D.C., that it is finally time to provide tax relief.
Our tax code blocks too many companies, from startups to corporate giants, from investing, hiring and expanding. It hinders thousands of small businesses from carving out their own version of the American dream.
We also have to remember that America's high corporate tax rate is not just a dollar figure that is felt by CEOs and shareholders.
In reality, the corporate income tax is burdened by workers in their wages and job opportunities. The National Retail Federation recently released a study stating that “high corporate tax rates push down wages of the average worker by as much as $4,690 a year.”
In fact, in Indiana alone, the nation's high corporate tax rate negatively affects Hoosier wages over the long term by -1.52 percent – not to mention the negative long-term effects a high rate has on Indiana's gross domestic product – money that could have been spent investing in our state's local economy, businesses and communities.
Other countries have figured it out.
The Organization for Economic Cooperation and Development, which catalogs global tax rates, reports that the rest of the industrialized world pays an average tax rate of 24.1 percent.
That's 10 points lower than our federal tax rate.
Mixed together our current tax code makes it tough for corporations to compete internationally, for businesses to grow and for Americans to prosper.
Unless our nation comes together behind tax reform, we'll lose.
Let's promote something we can all get behind, let's make it easier to own a business in this country and easier to raise salaries for millions of Americans across the nation.
Grant Monahan is president of the Indiana Retail Council.