Testifying before the U.S. Congress Joint Economic Committee Wednesday, Haas Professor Laura Tyson called for lower U.S. corporate tax rates to help the U.S. compete on a global stage.
"Today our corporate tax system is failing our country," said Tyson, former chair of the President's Council of Economic Advisors under President Bill Clinton. "It's reducing the competitiveness of the U.S. as a place to do business and create jobs."
Tyson's testimony came during a joint House and Senate committee hearing titled "Lessons from Reagan: How Tax Reform Can Boost Economic Growth."
Tyson argued that a higher corporate tax rate in the United States compared to other countries in the world currently encourages American companies to hold their foreign earnings abroad.
"Tax rates have an effect on where companies locate their operations, locate their jobs, and report their income," she said.
In written testimony, Tyson showed how the U.S. corporate tax rate has hovered around 39 percent since the early 1990s while countries in the Organization for Economic Cooperation and Development (OECD) have reduced their corporate tax rates from to an average of about 25.1 percent today.
Tyson suggested eliminating tax breaks and preferences to offset the drop in revenue that would result from lower corporate taxes. That would also reduce the complexity of the tax code and increase its efficiency, she noted.
"The good news on corporate taxes is there is widespread bipartisan agreement that the system is flawed and needs fundamental reform," she said. "We are on a path where we can get meaningful corporate tax reform….We should get going and do it."