Robert Reich says that Obama's offer to trade increased infrastructure investment for corporate tax reduction is foolish. He's right. The US has been lowering corporate taxes, through one industry-favorable tax expenditure after another, for decades. Corporate taxes as a percent of GDP have gone down, down, down, while corporations (through ALEC) write legislation to please themselves, fund 501(c)(4) groups to campaign for more corporate favoritism, offshore jobs, offshore profits from intangible properties, and generally thumb their noses at the nation and its citizens.
Reich provides a succinct description of the three main lies that the corporate lobby has been pushing for decades to deceive Americans into support corporate tax "reform" (read--revenue reduction provisions). Reich, Three Biggest Lies Why Corporate Taxes Should be Lowered, Salon.com (Aug. 5, 2013).
Lie #1: U.S. corporate tax rates are higher than the tax rates of other big economies.
As Reich notes, the Congressional Research Service did a study recently that demonstrates that US corporations are in fact taxed less than the average rate for OECD nations. The CRS study showed a US effective tax rate of 27.1%, compared to an average OECD rate of 27.7%.
Lie #2: U.S. corporations need lower taxes in order to make investments in new jobs.
Again, Reich points out the obvious. US corporations have so much cash they don't know what to do with it--with more than $2 trillion sitting in bank accounts (not yet repatriated for tax purposes, even though much of it is in US banks). It isn't lower taxes/more cash that is needed for them to create jobs; it is more customers! The declining wages of American workers (caused by the outsouring of US jobs and the cutthroat anti-labor policies of the Walmarts and other US corporations that treat workers as expendible commodities) has meant slow growth of demand, and without demand corporations will not produce more and without increased production, jobs won't be created.
Lie #3: U.S. corporations need a tax break in order to be globally competitive.
This is the lie that really gets me. As Reich says, its pure "baloney." US corporations are already competitive--they create jobs offshore, do R&D offshore, and serve global customers offshore. They don't need a US tax break to do that!
Even if a US tax break would help them do that (everybody likes more money in their pockets), it wouldn't do any good to anyone here in the US. It would only serve the owners and managers of the corporations, not American workers. There is no justification whatsoever for redistribution upwards (to global owners/managers of multinational corporations) to support outsourcing of US jobs and impoverishment of US families.