Business Roundtable is an association of chief executive officers of leading U.S. companies working to promote a thriving economy and expanded opportunity for all Americans through sound public policy.
Delivered January 17, 2014
Business Roundtable appreciates this opportunity to provide comments on the two staff discussion drafts released by Chairman Baucus of the Senate Finance Committee pertaining to international tax reform and cost recovery and tax accounting (the “discussion drafts”).
Business Roundtable is an association of chief executive officers of leading U.S. companies working to promote sound public policy and a thriving U.S. economy. Business Roundtable’s CEO members lead U.S. companies with $7.4 trillion in annual revenues and more than 16 million employees.
Tax policy has a profound impact on business investment, economic growth and job creation. Business Roundtable supports a competitive, pro-growth tax framework that promotes economic expansion and levels the playing field for U.S. companies competing in global markets. Tax reform must address the competitiveness of all businesses to fully strengthen the U.S. economy, enhance job creation, and enable American workers and businesses to compete effectively.
To this end, Business Roundtable believes that tax reform should include setting the corporate tax rate at 25 percent and adopting a modern international tax system, consistent with the principles of our major trading partners around the world. The Roundtable believesthese goals can be achieved in a revenue-neutral manner, without burdening individuals or small businesses.
Business Roundtable understands that tax reform will require a careful and balanced examination of existing tax preferences and that reform of the U.S. international tax system will be accompanied by appropriate safeguards to protect the U.S. tax base. Existing corporate tax preferences should be analyzed for their growth effects relative to the growth that can be achieved through a lower rate and a more competitive tax system.
Any review of existing tax preferences should not unfairly target or favor any industry, but rather should be undertaken with the objective of providing a lower corporate tax rate and modernized international tax system that would better promote economic growth. All revenues from corporate base-broadening measures should be applied to corporate rate reduction and to modernizing our international tax system. If base broadening revenues were instead used for other purposes, corporate tax reform would result in a net tax increase on America’s businesses and impede U.S. competitiveness in the global economy.
The business leaders of the Roundtable are encouraged by the growing bipartisan support for the goal of pro-growth tax reform that would increase the competitiveness of American businesses and create jobs. Now is the time for policymakers to strengthen their efforts to identify and agree upon the right policy solutions to unleash strong and sustained growth in America.
Chairman Baucus’ staff discussion drafts demonstrate significant work undertaken by the Senate Finance Committee to address the many complexities of the U.S. tax code. This effort reflects the reality that America’s current tax system has fallen behind the rest of the world, undermines competitiveness, is endlessly complex, and does not support a growth agenda for the future. However, several of the proposals in the international discussion draft would make American companies even less competitive than their non-U.S. counterparts.
Business Roundtable also believes that tax reform should achieve a 25 percent corporate tax rate and that the Committee’s efforts, as initiated in the domestic discussion draft, should be guided by this objective. Accordingly, we believe that further work and significant revisions to these discussion drafts are required, and this is described in more detail in this submission.