Cutting the US corporate tax rate is the "biggest single tool" to keep firms in the country and to attract foreign companies, investor Wilbur Ross, Donald Trump's pick for commerce secretary, said on Wednesday.
The billionaire investor, a one-time shareholder and director of Bank of Ireland, was questioned by a US Senate committee on his track record of reviving struggling companies and his views on how to grow the American economy as part of the vetting process to appoint him to the president-elect's cabinet.
The New Jersey native made an estimated €500 million profit after buying into Bank of Ireland at the height of the financial crisis and subsequently exiting.
Inducement
Mr Ross told senators that reducing the US corporate tax rate of 35 per cent, the highest of any developed country, would be "a further inducement" for foreign companies to set up in the United States. He referred to Mexico where the corporate tax rate is about half of the American rate.
He believes the US can grow by more than 3 per cent a year if Mr Trump’s protectionist “America First” economic policies are implemented.
“If we can become competitive in the tax rate, it would be a very good thing not only in keeping American companies staying here but also for encouraging foreign companies to come here,” he said.
A “degree of deregulation” and keeping energy costs lower would be “very powerful” too, he said.
“I am much more in favour of the carrots than the sticks,” he told the senate commerce, science and transportation committee.
The incoming Republican president has promised to reduce the US corporate tax rate to 15 per cent, putting it in close competition with the Irish rate of 12.5 per cent. He wants to rip up international trade deals that he claims have led to the loss of American jobs overseas.
Investments
Known for his investments in an array of industries, Mr Ross (79) said that his primary objective was increasing exports. His remarks will ease fears that Mr Trump’s aggressive trade policies including imposing tariffs on foreign imports might lead to trade wars and hurt US exporters.
“I am not anti-trade. I am pro-trade,” he said. “But I am pro-sensible trade, not trade that is detrimental to the American worker and to the domestic manufacturing base.”
Defending his reputation as a “vulture” investor in struggling businesses, Mr Ross said that he has been a “a very large net creator of jobs” in the US, citing his investment in the US steel industry.
Mr Ross said that his divestment of more than 90 per cent of his assets and resignation from 50 company boards to avoid potential conflicts of interest as commerce secretary had been personally costly.
He is understood to be resigning from the investment committee of WLR Cardinal Mezzanine Fund, which invests in Irish property, to meet the requirements of his confirmation process.
