NORMAL — A U.S. Chamber of Commerce official told Twin City business leaders Monday that the federal corporate tax rate needs to be lowered to help the country compete better in a global economy.
But Caroline Harris, executive director of tax policy for the Washington, D.C.,-based U.S. Chamber, does not anticipate significant reform will come anytime soon.
That doesn’t make it any less important, Harris told a gathering of 160 people Monday at the McLean County Chamber of Commerce’s Economic Vision Luncheon, held at the Marriott Hotel and Conference Center in uptown Normal.
“The train’s leaving. We can either get on it, or stand here and wonder why people don’t want to be based in this country anymore, or are moving their headquarters.
“I think it’s essential to reform the tax code in order to help business to grow,” she said.
Harris pointed to the country’s 35 percent corporate tax rate, which has stayed steady for 25 years, while other countries have been steadily dropping rates. The worldwide average is in the 25 percent range.
It also makes our tax rate the second-highest behind Japan, which raised its rate earlier this year to help recover from its tsunami.
Harris feels both tax reform and reducing the deficit are equally important in spurring business, but said spending cuts will come sooner thanks to the deficit reduction/debt ceiling compromise reached earlier this month in Congress.
A 12-member committee has been charged with finding $1.5 trillion in savings over the next 10 years. If a figure of at least $1.2 trillion is not agreed to by Congress by Dec. 23, automatic budget cuts will kick in Jan. 15.
“While deficit reduction is certainly not easy, you kind of have a base to work from there. Taxes are little bit harder, a little more contentious,” she said.
Harris also reviewed recent budget proposals from President Barack Obama, as well as some of the deficit-reduction plans of recent years that failed to reach Congress, such as last year’s recommendations from a bi-partisan deficit-reduction commission.
Charlie Moore, chief executive officer of the McLean County Chamber, said it is important for local businesses to keep up with national issues.
Winnie Feken, owner of Chuck’s Harley-Davidson in Bloomington, said she makes it a point to do so, and feels attitudes in Washington, D.C., are hurting her local business.
“It’s the uncertainty of our leadership. It’s affecting our customers,” said Feken. “It’s frightening.”