Cut corporate taxes, or close loopholes?
Henry Paulson testifies on Capitol Hill, June 2007
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Lisa Napoli: Today in Washington, Treasury Secretary Henry Paulson hosts a conference to focus attention on why he thinks the tax bite is putting U.S. corporations at a disadvantage.
Our D.C. bureau chief John Dimsdale has more.
John Dimsdale: In a report prepared for today's conference, the Treasury Department says U.S. corporations pay among the highest tax rates of all industrialized countries.
And that's chasing valuable investments overseas, says Treasury's Robert Carroll:
Robert Carroll: Perhaps where to locate a headquarters, where to locate a plant and make other investments, the corporate tax rate is material to those decisions.
But another participant in today's conference, Brookings Institution tax expert William Gale, says not all companies pay those high tax rates, thanks to a long list of deductions and investment tax credits.
William Gale: We have very generous treatment of particular sectors — oil, gas, timber, et cetera — what turn out to be loopholes that end up reducing the effective tax rate on corporate investment.
Get rid of the loopholes, Gale says, and the U.S. could lower the overall tax rate without losing revenue.
In Washington, I'm John Dimsdale for Marketplace.