Washington – Business Roundtable (BRT) today launched The Campaign for Home Court Advantage, a national campaign to raise awareness of the need to modernize our outdated, complex tax system in order to enhance job creation and promote a healthier economy in the United States.
“It’s time we reclaim America’s home court advantage by modernizing tax policy in a fiscally responsible way so all U.S. businesses can create jobs, innovate, grow, compete – and win,” BRT President John Engler said. “America’s ability to compete in the global marketplace is undermined by a decades-old tax policy playbook that stands in the way of domestic job creation, discourages business investments and thwarts economic growth. We know that if the American economy can play by the same rules as our global competitors, American workers, innovators and entrepreneurs will come out on top.”
Today, the United States has the highest average combined corporate tax rate (state and federal) of any nation in the developed world, 14 percentage points higher than the average of our major international competitors. Remarkably, the United States is also the only member of the G8 with a “worldwide” tax system, which double taxes foreign earnings of U.S. companies.
The campaign will make the case for comprehensive tax reform – including a competitive corporate rate and a transition to a more modern and competitive international tax system. The Campaign for Home Court Advantage will engage member companies, their suppliers, a broad-based network of state business roundtables, and employer allies and partners across America. Utilizing traditional and digital media, events and local outreach, the campaign will bring to life the concerns and aspirations of job creators who are held back by the current uncompetitive tax code and want the United States to make up lost ground against our global competitors. The campaign will be supported by paid advertising and advocacy inside the Beltway.
“America’s economy has great advantages, from world-class workers and productivity to unparalleled institutions of higher education and abundant domestic energy supplies. However, our corporate tax code is a distinct disadvantage that holds us back,” said Robert A. McDonald, Chairman, President & CEO of Procter & Gamble Company and Chair of BRT’s Tax and Fiscal Policy Committee.
BRT leaders are calling on Congress and the Administration to work together on a bipartisan basis to pass comprehensive job-creating legislation and give America the Home Court Advantage, which must include:
- Reducing the corporate tax rate to 25 percent. The statutory corporate rate in the United States is 35 percent, and the averaged combined rate is 39.1 percent. Our OECD competitors have a combined average rate of 25 percent. Given this wide disparity, there is bipartisan agreement that corporate tax reform – including lowering the corporate tax rate – would make the United States a more attractive location for business investment from both American and foreign companies, helping to create jobs and drive economic growth.
- Ending the double taxation of U.S. corporations’ foreign earnings. Every independent U.S. advisory board, working group and federal agency tasked with reviewing and proposing corporate tax reform options has recommended that the United States move toward a more modern and competitive international tax system that would spur job creation and economic growth. Transitioning from the uniquely uncompetitive “worldwide” system to a market-based “territorial” system is a game changer that will put American companies on an equal playing field in the global marketplace in which territorial tax systems are the norm.
- Simplifying the corporate tax code. The last significant overhaul of the U.S. corporate tax system was in 1986. Since this time, most changes have been piecemeal, “Band-Aid,” and temporary solutions that add to our already overly complex tax rules. Streamlining the current corporate tax system will minimize the financial burden of compliance costs on American businesses, freeing up more capital for growth and expansion, which directly leads to new jobs.
- Reforming the corporate tax code in a fiscally responsible, revenue-neutral way. The Roundtable advocates that these reforms be achieved in a revenue-neutral manner by relying solely on broadening the base of the corporate tax system. Research has shown that a competitive corporate tax code will have a substantial, positive effect on U.S. businesses of all sizes and the economy at large.
“Our outdated, uncompetitive corporate tax system is forcing American businesses to compete in a global market with one hand tied behind our backs,” McDonald said. “Modernizing our tax system and allowing businesses to play by the same rules as their global competitors will encourage them to bring their earnings home, invest more in the American economy and pull more American workers back into the U.S. job market.”
Momentum for America
Business Roundtable is focusing its efforts on greater job expansion and economic growth – national priorities that are inextricably linked. Informing our plan is our collective business experience as CEOs of America’s leading companies, experience that tells us what it takes to build momentum for the United States in in 2016 and beyond.