Corporate loopholes not only cost taxpayers millions, but they also hurt our overall economy, which has led citizens and politicians alike to agree that cutting corporate favoritism is a necessary reform. In fact, cutting corporate favoritism has been backed with bi-partisan support from Democrats including Nancy Pelosi and Edward Kennedy to Republicans including Patrick Toomey and John McCain. Thus, it is largely corporate lobbyists and certain vested interest politicians that favor sustaining corporate favoritism. While Robert S. McIntyre’s “Opposing view: Close loopholes, fix problems” (USA Today, 9/17/07) makes some good points, the money saved from cutting corporate favoritism shouldn’t be filtered into other areas such as healthcare, retirement, and road construction. It’s not that these social services should be neglected or receive less funding, but these savings should accumulate toward lowering the overall effective corporate tax rate for three primary reasons: 1. Small to medium-sized businesses are being shut out of business opportunities. In particular, businesses that do not generate $1M in revenue but pay the 34-39% corporate tax rate cannot compete with larger corporation that benefit from a lower tax burden. Why should small to medium-sized businesses be forced to pay a larger tax bill and essentially leak profit? Many mid-sized businesses fail each year because of the undue tax burdens they face. 2. Lowering the overall corporate tax rate would finally eliminate the incestuous relationships between certain politicians and corporate lobbyists in Washington, D.C. Large corporations would then be free to focus more of their energy on profit-generating, rather than on politics. 3. Cutting corporate favoritism enjoys bi-partisan support. Political expediency will demand that savings derived from cutting corporate favoritism should be shared with all companies by reducing the corporate tax rate. If we try to steer the savings toward other areas of reform, the issue—and consequently, the money—will get lost in the shuffle.
— Courtney Haynes | Hope Street Group Fellow
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