FedEx Seeks Significant Reduction in U.S. Corporate Tax Rates

Dear Secretary Paulson:

This is to reiterate how much I appreciated and enjoyed being on your panel discussion of the above-captioned topic last Thursday. As we discussed, it is clear that the U.S. tax system is fast becoming a hindrance to job creation, international investment, and the growth of multinational corporations in this country. The Cato Institute recently put it succinctly when it said that the "U.S. tax system is an anachronism that discourages growth and undermines job creation." Depending on which study one considers, the U.S. has either the highest, or second highest, corporate income tax rate in the world. At 40%, our tax rate far exceeds those of most of our major trading partners such as China, whose rate is being reduced to 25% at the end of this year, Germany, whose rate is being reduced to 30%, the U.K. at 30%, the Netherlands, at 25%, and the average OECD rate of 27.8%.

The United States must significantly reduce its corporate income tax rate, preferably to 25%, but at least to 30%. The rate reduction will pay for itself -- study after study and experience after experience has demonstrated that. However, even if revenue offsets were necessary, for example, in the form of a broadened corporate tax base, that, in conjunction with a significantly lower corporate tax rate, would be preferable to the anachronistic and out-of-touch system we have now.

I applaud you for your attention to this matter and encourage you and others in positions of responsibility across the country to address this matter sooner rather than later.