America has the highest corporate tax rate in the developed world. We do not possess "one of the highest" corporate rates. Our corporate rate is number one.
Our combined federal and state tax rate is more than 39 percent. China taxes businesses at a rate of 17 percent. The European average is 25 percent. The United Kingdom is 20 percent. Ireland is just 12.5 percent. It is often nice to be the biggest or largest, but not when the issue is "who has the highest tax rate?"
America is also one of the few countries with a worldwide taxation system rather than a territorial system. If you are an American company, you pay taxes when you earn income overseas and then our government taxes you again. Together those two uniquely stupid and destructive policies are forcing American companies to move overseas through a corporate inversion or leaving them vulnerable to be purchased by foreign firms.
The solution should be obvious -- fix these two problems by passing pro-growth tax reform. In their recently released "Better Way" Tax Reform blueprint, House Republicans call for updating the tax code to 20 percent - 5 below the European average, and implement a territorial system that ends the double taxation of our businesses.
Every 0.1 percent of additional economic growth can lead to as much as $286 billion in extra federal revenue - all without raising taxes - so this plan smartly prioritizes economic growth and simplification.
In contrast, Obama has refused to act over the past eight years and has derided the American competitiveness problem as a "race to the bottom." Hillary Clinton is set to follow his lead and continue to ignore the problem.
Hillary has already proposed more than $1 trillion in new taxes and looks set to follow Obama's path in pushing for destructive policies. Clinton has also called for an exit tax on businesses that are forced to leave the country and has suggested further complex regulations to crack down on businesses.
Year after year, the Obama White House claimed they understood the high rates were making it impossible, or difficult, for American companies to compete. But instead of addressing the problem, Obama called for a new tax on income earned by American businesses overseas and new regulations to trap our businesses.
Now, in his final months of office Obama is using the inversion "problem" as an excuse to push excessive regulations that give unaccountable IRS officials power over business investment decisions. These new debt-equity regulations will do nothing to stop the underlying problem that is driving inversions.
Inversions are occurring because our tax code is outdated that business cannot compete with foreign competitors. In the past decade, close to 50 American businesses have left the country through an inversion while we have also lost $179 billion worth of assets through acquisitions by foreign competitors.
Other countries understand that they have an opportunity to steal our businesses and high-paying jobs and are aggressively introducing pro-growth tax systems. 31 of 34 countries in the developed world have reduced their rates this century. We have not. The United Kingdom plans to reduce their corporate tax rate to 18 percent by 2020. Dozens of our competitors have proposed or created "innovation boxes" that give a lower tax rate to businesses that create high paying, IP intensive jobs.
The problem is only going to get worse if we do nothing. Obama has refused to act to address America's competitiveness problem throughout his presidency, and Hillary has already shown she will be no different. New regulations will only compound the problem and result in more of our iconic businesses leaving or being acquired.