While skeptics point to the array of provisions that allow a reduction below the topline statutory rate, many ignore the additional burden created by state and local taxes. It is abundantly clear that, when compared to the rest of the developed world, the U.S. rate is out of step at best and uncompetitive at worst.
The current global tax system in the United States puts manufacturing firms at a disadvantage inside and outside foreign countries. If the United States converted to a territorial system as part of comprehensive tax reform, it would remove the current barrier to corporate repatriations (transfers in foreign subsidiaries' profits to U.S. parent companies), promoting a marked rise in domestic investment.
