In what many have called a surprising move, Rep. Martin Heinrich (a candidate for the US Senate) has come out in favor of dramatic reductions in the US Corporate income tax rate. Heinrich has not exactly compiled a record of fiscal restraint in Congress, so this is definitely a shift.
Well, let’s give Heinrich the benefit of the doubt here. First and foremost, the United States now has the highest corporate income tax rate in the world. Heinrich — like most mainstream economists — undoubtedly views the current corporate income tax rate as problematic. Good for him. I hope he makes corporate tax reduction a central focus of his efforts in Washington.
Of course, the cynic would say, Heinrich is also running for the US Senate. With concerns about jobs paramount in Americans’ minds, coming out in favor of reduced corporate income taxes is a good way to position yourself as a fiscal moderate, regardless of your actual record. This is especially true given the very real problems Democrats — Obama in particular — are facing on the economy.
Personally, while I do believe that corporate income tax rates are problematic, I think the policy uncertainty inherent in ObamaCare and new financial regulations (along with the nation’s deteriorating financial situation) is what is driving current economic problems. Reducing corporate income taxes would be a good move, but overturning ObamaCare and dramatically-reducing federal spending would do more for the economy, particularly if one — like Heinrich — might be concerned with future electoral success.