In a coalition letter led by the Center for Individual Freedom (CFIF) and sent to Congress yesterday, a group of national and state organizations representing taxpayers, small businesses and free-market, limited government principles cautioned Congress against limiting corporate deductions for state and local taxes, or C-SALT – a potentially counterproductive tax change being contemplated as a possible offset to “pay for” a portion of the revenue cost of extending TCJA – without lowering the corporate tax rate.
“One of the landmark achievements of TCJA was lowering corporate tax rates from the suffocating Obama-era 35% to today’s globally competitive 21%,” the letter reads after declaring that its signatories stand united in support of extending or making permanent the tax cuts implemented through the Tax Cuts and Jobs Act of 2017 (TCJA). “That change has boosted U.S. Gross Domestic Product (GDP), powered historic growth, created new incentives to manufacture and build in America, and is projected to more than pay for itself in just the first ten years. Indeed, recognizing those benefits, President Trump now proposes to lower the corporate rate even further to 15%,” the letter adds.
“Eliminating or limiting the C-SALT deduction without proportionally lowering the corporate tax rate, however, would constitute a destructive and costly step backwards. It would result in a stealth tax increase that would raise effective U.S. corporate tax rates for many businesses,” continues the letter.
The letter is signed by representatives of the following organizations: Center for Individual Freedom, Americans for Tax Reform, Center for a Free Economy, Consumer Action for a Strong Economy, Hispanic Leadership Fund, Innovation Economy Alliance, Jersey 1st, The Market Institute, Small Business & Entrepreneurship Council, and Shareholder Advocacy Forum.
To read the full letter, click here (pdf). |