BRT President John Engler starts the day as guest on C-SPAN's "Washington Journal" program, set for the 7:45 a.m. to 8:30 a.m. slot. Topics include the economy and taxation.
Not to prejudge the session with President Obama and CEOs, but taxation is likely to be a topic. The Administration on Feb. 22 released its "Framework for Business Tax Reform," which included some good -- a lower corporate tax rate -- and some not-so-good -- failure to move toward a competitive territorial system and the imposition of a new tax on worldwide revenue. BRT responded with a release, "It’s Official: President Embraces Lower Corporate Tax Rate But Revenue Neutrality, Competitive Territorial System Missing."
The Mercatus Center's Veronique de Rugy examined the President's tax proposal in an op-ed in The Washington Examiner, providing examples of how the U.S. reliance on a worldwide system creates a competitive disadvantage for U.S.-headquartered firms:
Imagine a French firm competing with a U.S. firm for business in Ireland.
The Irish government taxes each subsidiary on its Irish income at the (low) national rate of 12.5 percent. Fair enough. But unlike the French competitor, the U.S. parent company must also register its Irish affiliate's dividends back home as income, which is then taxed.
If the company can meet certain requirements, it can receive a credit for taxes paid to the Irish treasury. But the firm would still have to pay American taxes at the American rate on the Irish income, minus the tax credit. The result is double taxation, costly paperwork and less competitiveness with the French.
These differences have important implications for American companies competing in foreign markets. Because of higher tax costs, U.S.-based firms are losing foreign market share, generating lower returns for American shareholders, and hiring fewer skilled workers back home in the U.S.
Indeed. Good topic for a discussion. The recommendations of the BRT's upcoming "Taking Action for America: A CEO plan for Jobs and Economic Growth" also provide fodder for an exchange of views.
UPDATE (4:10 p.m.): President Obama last met with BRT CEOs in February 2010. Here's the transcript of his remarks.
Business groups step up push for fast-track authority - The Hill's On The Money http://t.co/Z4rhAggr1X
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