The National Association of Manufacturers is active in a broad-based coalition, PACE, which stands for Promote America’s Competitive Edge, which includes major U.S. businesses with international operations. Among the revenue provisions being considered to pay for an expansion of health care coverage are dramatically higher taxes on those corporations for earnings made overseas. The tax hikes would be extremely damaging to U.S. competitiveness.
A PACE letter signed by 280 companies and associations has just been sent to members of Congress, outlining the deletrious impact. Excerpt:
American companies with worldwide operations directly employ 22 million American workers and support an additional 41 million U.S. jobs through their supply chain and through the purchases of goods and services by their employees. A steep corporate tax hike on worldwide American companies, especially during a severe recession, will hinder our ability to protect and create American jobs and will slow our nation’s economic recovery.
The current U.S. international tax system has evolved over decades in a manner that attempts to keep worldwide American companies on a nearly level playing field with competitors in other nations. Meanwhile, other leading economies are moving to make their corporate tax systems more competitive. As a result, the United States lags behind and is increasingly isolated from the rest of the world.
The U.S. business community supports closing tax loopholes and prosecuting those who cheat on their taxes. However, the current international tax rules including deferral, check the box and foreign tax credits are fundamental tax provisions, and are integral parts of the US tax system – not “tax loopholes.” It is inaccurate and misleading to represent them as such.
That’s right. And politicians who decry “tax incentives for shipping American jobs overseas” are engaged in cynical populism.
The letter is a very clear introduction to the dynamics of international taxation and U.S. competitiveness. Highly recommended.
And here’s the news release.
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