Democratic presidential nominee Hillary Clinton has detailed proposals for all manner of economic stimulus. Conspicuously absent: any kind of plan for corporate tax reform.
That’s odd, because for everything Democrats and Republicans disagree on—taxes, immigration, trade, the color of grass—they actually agree in principle that the tax code governing business is a mess that needs to be fixed. The US corporate tax rate, at 35%, is one of the highest in the developed world, which creates an incentive for big companies to shift business and profit to other countries. And an encyclopedia’s worth of tax breaks lets select firms in favored industries pay far less in taxes than others.
Investment banker Roger Altman, a key Clinton adviser, explained Clinton’s view on corporate tax reform during a live Yahoo Finance panel discussion on the two presidential candidates’ economic policies. “We need corporate tax reform,” he said. “The campaign isn’t the place to negotiate the rate. Let’s wait until the election is over. At some appropriate point, she’s going to make a proposal.”
In other words: It’s coming. It’s just not something Clinton wants to discuss during the campaign, when any plan to cut business taxes could be taken as a sop to corporate interests.
Clinton’s rival, Republican Donald Trump, wants to cut the corporate tax rate from 35% to 15%, as part of a sweeping series of tax cuts meant to stimulate the economy.
Many analysts think there’s a middle ground between Democrats and Republicans on corporate tax reform. President Barack Obama has proposed lowering the rate to 28%, while closing many tax breaks businesses get, as a way of evening out the tax burden on different types of companies. But some businesses already pay less than 28%, on account of the same tax breaks Obama wants to eliminate. So the corporate sector is split on Obama’s threshold.
Clinton could adopt Obama’s tax reform plan, more or less, or hew to a different formula. The makeup of Congress after the election will doubtless have something to do with where she comes out on the issue, since Republicans will have plenty of say on the matter as long as they control as least one house of Congress.
There’s no shortage of tax-reform plans to choose from. “There have been endless hearings on corporation tax reform, which is good,” Altman says. “Innumerable experts have weighed in.” The only one who hasn’t could be the nation’s next president.
Rick Newman is the author of four books, including Rebounders: How Winners Pivot from Setback to Success. Follow him on Twitter: @rickjnewman.