With the 112th Congress now sworn in, it’s undisputed that they have a tough job ahead. Inheriting a $13 trillion national debt, entitlement programs that threaten to sink the nation, massive unfunded government programs outside the federal mandate… who in their right mind VOLUNTEERS for that, anyway? 

To help our new elected officials along the way, I’ll be posting one policy recommendation a day for the next 30 business days. We’ll address a variety of issues, including health care, spending, education, and overall reform. To give credit where credit’s due, I borrowed the idea from our friends at the Goldwater Institute in Arizona – whose annual publication for state legislators, 100 Ideas for 100 Days, is a quick and informative read! 

Suggestion #1: cut the corporate tax rate.

The United States has a combined corporate income tax rate of 39.21% – which in 2010 was the second highest in the OECD (industrialized nations) behind Japan. However, given that Japan will be cutting their corporate tax rate by 5% this year to “stimulate investment in Japan and to encourage businesses to create more jobs,” that gives the U.S. the dubious distinction of being number one.

Unfortunately, the U.S. has made itself less competitive in the global marketplace given its high rates. The Cato Institute’s Dan Mitchell likens this to squeezing the goose that lays the golden egg – international corporations, who have the ability to headquarter anywhere in the world, are less likely to settle in a place that takes a higher percentage of their profits.

To encourage more companies to locate and operate in the U.S., it’s imperative to provide a business-friendly environment. More businesses mean more jobs – which will lead to stronger economic growth and a path towards reducing the deficit.