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Revamping the corporate tax code could improve America’s competitiveness and living standards
The US corporate tax code is impeding the nation’s ability to compete in the worldwide economy, according to Mihir A. Desai (MBA 1993, PhD 1998), the Mizuho Financial Group Professor of Finance. Desai has found that current US policies divert capital toward other countries—thereby limiting investments that could raise American productivity and living standards.
“A handful of changes would transform the corporate tax system from an obstacle to an asset,” says Desai. He advises creating better incentives for global corporations to locate and invest in the United States, such as a reduction in the corporate tax rate, a new tax policy fostering innovation, and an end to taxes on active foreign income.
Desai stresses that, for reforms to be effective, corporations must view tax obligations as serious social responsibilities. Any statement of corporate values that includes a commitment to outside stakeholders—communities, the environment, customers—should incorporate a commitment to fulfill tax obligations.
(Published April 2014)
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