Senator John Thune
For business owners across South Dakota who have wisely chosen to do commerce within our borders, news that CNBC had ranked South Dakota the number one state in the country to do business was not surprising. Our state government has worked hard over the years to create favorable economic conditions for our residents. South Dakota’s strong leadership, good fiscal management, low regulatory burden, and simplified tax structure have created conditions that have increased prosperity and continue to create jobs throughout the state.
I’m proud to represent a state that has found such great success managing its budget, cutting red tape, and creating incentives for good jobs through a pro-growth tax structure. Unfortunately, South Dakota’s success is yet another reminder of how Washington’s broken policies of new spending and higher taxes are not working.
The Senate Finance Committee has begun a critical debate on how to best address tax reform in our country. Comprehensive tax reform can make American businesses more competitive in the global economy and can benefit families who are dealing with a growing and increasingly complex tax code. Additionally, tax reform can help to address our ever-expanding budget deficit by unleashing economic activity that will ultimately raise federal tax receipts, even at lower tax rates.
Our tax code has grown considerably and has become a complex maze of special interest provisions and “temporary” tax measures. However, America now faces a much more intense global competition for jobs and investment than it did 25 years ago. Today, multinational corporations can place the next cutting-edge research and development or manufacturing facility anywhere from Bangalore to Shanghai. Unfortunately, our tax code still operates as if this competition for jobs and investment is irrelevant.
America’s combined state and federal corporate tax rate is the highest in the developed world, topping out at nearly 40 percent. Even Russia, at 20 percent, and China, at 25 percent, are lower. Since 1998, the average corporate tax rate of advanced economies has dropped by 19 percent, while the U.S. rate has risen by 1 percent.America should take a lesson in economic growth and prosperity from the success South Dakota has found with its simplified tax structure. Streamlining our tax code will strengthen our economy, improve the competitiveness of our businesses, and greatly ease the tax burden for American families. I will continue my work in the tax-writing Senate Finance Committee to fight for a tax structure that will create wealth and improve take-home pay for the people of our state and nation.