Senator Mike Lee spoke to business leaders Wednesday at a World Trade Center Utah hosted forum about navigating globalization and creating policies to help America’s middle class.
WTC Utah President and CEO Derek B. Miller kicked off the forum by talking about the growth opportunities trade offers.
“If you are selling popcorn in a football stadium on a beautiful Saturday, why would you limit yourself to row 5 of section BB? The same principle applies to trade,” said Miller. “95 percent of the world’s customers live outside of the U.S. At World Trade Center Utah we want to help companies sell more products and services to those customers.”
During his remarks, Senator Lee acknowledged both the benefits and challenges of globalization. He is concerned that today’s global capitalism brings together rich people from rich countries and leaves low- to middle-class workers out of the equation.
“Globalization is a phenomenon that extends the benefits of capitalism beyond national borders,” said Lee. “This opens up all sorts of opportunities, but it also puts a new twist on the relationships between rich people and not rich people.”
Senator Lee’s suggested solution to this problem is to implement a two-step tax reform: eliminate federal corporate tax all together, and raise taxes charged on dividends and capital gains.
According to the senator, economists estimate that up to 50 percent of all corporate tax paid to the federal government comes out of wages. Senator Lee believes his proposed solution would increase wages and level the playing field between American workers and American investors. His hope is the new tax framework would tilt the playing field in the global economy in favor of the United States.
“Rather than compete against foreign tax havens, the United States would become the world’s new tax haven. For foreign investors, this tax reform would be an offer they couldn’t refuse,” said Senator Lee. “Even for American investors, this is a framework that would offer a better deal than they could get anywhere else.”
Senator Lee stated that rather than withdrawing from global trade, we should look for ways to benefit from it.
International trade is an important part of Utah’s economy. Over the last decade, value-added exports, which include all exports except primary metals, grew by more than 75 percent. Utah exported approximately $12.1 billion worth of goods and services in 2016.