Last week, two former Administration officials weighed in on the need to update our tax code so it discourages businesses from relocating overseas for tax purposes. Both Austan Goolsbee, the former Chairman of the Council of Economic Advisers under President Obama, and David Walker, the former U.S. Comptroller General under Presidents Clinton and Bush, addressed this issue and discussed ways to make the U.S. more competitive.
Appearing on CNBC, Goolsbee blasted our complicated and deeply messed-up corporate tax system because it encourages companies to reincorporate overseas.
Our tax code is so outdated, Goolsbee said, that it's a motivator just itself to have transactions even if they didn't make economic sense. Our corporate tax system gives an incentive for foreign purchases of U.S. companies so they can then flip where the headquarters is.
Walker agreed, saying there is absolutely no question that the U.S. tax code is overly complex and not competitive. Citing our need for a territorial system and the fact that the U.S. has the highest corporate income tax rate in the developed world, Walker argued that the U.S. urgently needs comprehensive tax reform that will broaden the base, lower the rate, [and] go towards territorial taxation.
Watch the interviews: