As the deadline to strike a deal on the debt ceiling draws closer, former president Bill Clinton criticized the nation’s corporate tax rate over the weekend, saying it should be lowered as part of an agreement between the parties, according to Politico.
“We’ve got an uncompetitive rate,” Clinton told a crowd at the Aspen Ideas Festival on Saturday, Politico reports. “We tax at 35 percent of income, although we only take about 23 percent. So we should cut the rate to 25 percent, or whatever’s competitive, and eliminate a lot of the deductions so that we still get a fair amount, and there’s not so much variance in what the corporations pay.”
“But how can they do that by August 2?” Clinton added, referring to the cutoff point for negotiations, the date when the U.S. will reach the limit of its borrowing abilities and likely begin defaulting on its loans.
In practice, though, American corporations often end up paying significantly less than the full 35 percent. Through tax breaks and loopholes, The New York Times reported in May, “United States corporations pay only slightly more on average than their counterparts in other industrial countries.”
And it’s common for major corporations — including, in the past year, General Electric, Exxon Mobil, and Boeing — to sidestep taxes entirely.
Clinton also offered his thoughts on corporate tax policy on Thursday, June 30, when he spoke out in favor of a corporate tax holiday, which would allow companies to repatriate overseas profits at reduced tax rates.