American Dreams by Marco Rubio Read Free Book Online Page A

for America, it also means we have competition. Today, capital investment moves freely across borders, landing wherever it can generate the best return. Americans are in a daily contest to attract investment here, to persuade investors to start a new business or grow an existing business in our country instead of abroad. In this contest for global investment, the United States has put itself at a great disadvantage.
    As hard as it may be to believe, the country that produced Ford Motor Company, IBM, Microsoft and Amazon has the highest corporate tax rate of any advanced economy in the world. Combining federal and state taxes, our corporate rate is nearly 40 percent. The global average is under 25 percent. On the basis of taxes alone—putting aside the cost of regulations and labor—it is more expensive to invest and create jobs in America than in most other developed economies in the world. If we stick with this status quo, we risk losing the next great American company before it has the chance to begin. Already every day seems to bring news that yet another company has relocated its headquarters to Canada or Ireland. Liberals question the patriotism of companies that do this to avoid high U.S. taxes, but they fail to acknowledge that this behavior, although regrettable, is perfectly rational, even necessary to survive in a global economy in which we have stacked the deck against our own companies.
    This is especially true when it comes to smaller and midsize employers. After all, politically connected corporations are able to carve out loopholes in the tax code that shield them from its anticompetitive effects. General Electric is the poster child for this. While GE may not have reduced its tax burden to zero as was reported in 2012, it’s safe to say it didn’t pay the full 40 percent.
    But what happens to the employer that can’t hire a large law firm to find the loopholes? What happens to the employer that can’t hire the Washington lobbyist to create the loophole? What happens is that either they open overseas or, more likely, they never open at all.
    It starts with not having access to the money to open up in the first place. Over 70 percent of new businesses are launched using savings or by borrowing against assets, particularly houses. 2 But the housing crisis all but choked off this source of investment funds. Therefore, making it easier for people to start new business in America begins by giving people access to more of their own money. Utah Senator Mike Lee and I have dedicated ourselves to begin to accomplish this through the development of a new, modernized tax reform plan. Our plan is broad and fundamentally both pro-growth and pro-family. I will discuss the pro-family aspects of the plan in Chapter Five. As for the plan’s pro-growth emphasis, it rests on creating new investment in American jobs by lowering taxes and leveling the playing field.
    Because so many small and new businesses pay their taxes on personal income tax returns, our proposal integrates both the individual and business sides of the tax code in order to put small businesses on an even footing with big corporations. It prioritizes replacing our current business tax system with a new, globally competitive model. Instead of carving out exemptions for favored industries that have lobbyists, we propose a pro-growth tax code that treats all employers equally, regardless of their business structure. Furthermore, our plan would allow American employers to be more competitive with foreign companies by lowering our tax rate on businesses.
    We also propose allowing employers to immediately deduct every dollar they invest back into their business. The Treasury Department estimates this deduction would stimulate investment about four times as much as lowering the tax rate. The reason is simple. Being able to immediately expense investment would apply only to new investment, incentivizing businesses to undertake more of it.
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