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Sen. Elizabeth WarrenElizabeth WarrenRestless progressives eye 2024 Poll: Harris, Michelle Obama lead for 2024 if Biden doesn't run Biden eyes new path for Fed despite Powell pick MORE (D-Mass.) says the big issue with the U.S. corporate tax code is not that taxes are too high — it's that the revenue generated from the taxes is too low.
The liberal stalwart said most U.S. corporations pay much less than the 35 percent corporate tax rate because of loopholes in the tax code, including rules that let companies shift income overseas.
“Only one problem with the over-taxation story: It’s not true,” Warren said at the National Press Club on Wednesday. “There is a problem with the corporate tax code, but that isn’t it.”
Warren laid out three principles for corporate tax reform: Permanently increase the share of long-term revenues paid by large corporations, level the playing field between small and big businesses, and promote investment in U.S. jobs.
“Our tax code should protect jobs and investments at home, period,” she said.
“The lobbyists have a pretty strong elevator pitch” that the U.S. needs lower corporate tax rates because the top rate of 35 percent rate is leading companies to flee the country, Warren said, noting that GOP presidential candidates such as Donald Trump, Ben Carson and Sen. Marco Rubio (R-Fla.) have made such comments.
But various tax preferences let companies have effective tax rates that are much lower, and some of the largest corporations have a rate of zero, Warren said, highlighting the ability for companies to attribute corporate income to subsidiaries in offshore tax havens.
Warren criticized three corporate tax reform ideas getting attention in Congress. The first, known as “deemed repatriation,” would let companies bring back offshore money but have it taxed at a rate well below the corporate tax rate.
Warren called it a “giant wet kiss for the tax dodgers who have already parked $2.1 trillion overseas.”
The second — to tax overseas income at a rate lower than the one for U.S. income — is “even worse,” Warren said.
The third reform Warren criticized is the idea of an “innovation box,” which Warren said would allow companies to pay lower taxes on some earnings but would not actually stimulate innovation.
“I think of it as the gift for lazy tax dodgers,” she said.
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