The July 10 editorial “ Tax flight” missed wide of the mark when it comes to inversions and business tax reform. Companies are not leaving the U.S. for other nations because of declining faith in the nation or a lack of patriotism. In reality, they are fleeing for far more practical reasons, namely, foreign rivals are offering more competitive tax environments.
After the bipartisan Tax Reform Act of 1986 when President Reagan worked with congressional Democrats to lower rates and simplify the system, America had one of the most competitive tax codes in the world and was attractive to foreign businesses and start-ups alike.
Today, the opposite is true. After almost 30 years of growing complexities and other nations’ concerted efforts to lower their corporate tax rates, businesses are finding America’s tax system increasingly burdensome. Thankfully, the solution is clear.
Democrats and Republicans, as well as small and large enterprises, agree on the goals of reform. Streamline the code, lower rates and create a playing field that encourages job creation and investment.
North Carolina is leading the way as last year’s tax reform bill is enacted. Now is the time for Washington to follow suit.
Elizabeth Johnson, Wake Forest