Former CEO of American Express Harvey Golub advocated Thursday for eliminating the corporate income tax. Appearing on Neil Cavuto’s Fox Business show, Cavuto: Coast to Coast, Golub said he hopes to see Congress focusing on tax reform that will create the most economic growth.
“Corporate tax rates ought to be zero. The fact that corporations don’t pay taxes it is simply a way of collecting money for the federal government without actually having the people who are paying it, pay it directly,” he said.
What Golub means when he says corporations don’t pay taxes is that the true cost of corporate taxation is passed on to labor and consumers. The result is lower wages, cuts to benefits, and higher consumer prices.
Golub says he hopes Congress lowers taxes for everyone but argues that cutting taxes for the middle class will have little impact on economic growth. He believes that a lower corporate tax rate should be the focus of Republican efforts.
“I would argue that the president and Congress should stick to their guns and if they get nothing other than a lowering of the corporate tax rate, I would argue a zero—that would be the best number—but any number below 20 is going to be better than where we are now,” Golub said.
But President Trump doesn’t seem to share Golub’s sentiment. Earlier this week, Trump said that tax reform will be aimed at the middle class and that the rich “will not be gaining at all.”
The president’s rhetoric is certainly closer to national opinion than Golub’s. To be sure, a lot of Americans see corporations as adversarial powers that should be forced to share their wealth. But an objective analysis shows that attitude to be motivating bad policy.
A zero corporate income tax would be a turbocharger for the national economy. Businesses from all over the world would want to have operations here. Existing businesses would find themselves with extra capital which would spur hiring and investment. And yes, all those new jobs would produce taxable income.
Golub is correct; if Republicans really want to better the lives of Americans and ensure a better tomorrow, they need to focus on economic growth. The best way to secure economic growth is by eliminating the corporate tax rate.