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Territorial Tax System: Increasing U.S. Competitiveness and Economic Growth

October 28, 2011

Chairman Dave Camp unveiled an international tax reform discussion draft Wednesday as part of the Committee’s broader effort on comprehensive tax reform that would lower top tax rates for both individuals and employers to 25 percent.   The plan would also transition the United States from a worldwide system of taxation to a territorial system.  Many business groups, tax reform organizations and employers voiced their strong support for the plan as a vital part of much-needed tax reform, noting that it will increase U.S. competitiveness and encourage economic growth, in turn creating U.S. jobs.

Reducing America’s Taxes Equitably (RATE): “The United States corporate tax rate is outdated, out-of-step, and uncompetitive with the rest of the world. More than 25 years have passed since the last major overhaul of our tax system—it’s time, now, for comprehensive reform.  A substantial reduction in the corporate tax rate, as Chairman Camp outlines in his plan, serves as a catalyst for job creation, economic growth and the boosting of U.S. competitiveness in the global market. The RATE Coalition applauds Chairman Camp for putting his ideas on the table and starting this vital discussion.”

Business Roundtable: “Corporate tax reform will directly benefit the American workforce. By increasing the worldwide competitiveness of American companies and American workers, and attracting investment to the U.S., tax reform can be a tremendous jobs bill…We look forward to working with Chairman Camp and the Congress to enact corporate tax reform. The sooner comprehensive corporate tax reform can be enacted, the better it will be for the economy.”

Information Technology Industry Council: “At a time of heated political rhetoric and risk, Chairman Camp has put forward a bold and practical plan for international tax reform that highlights the fact that our current system is broken and too often working against us. We are in critical need of a system reboot on the tax issue. Moving to a territorial system, reducing the corporate rate and encouraging the repatriation of foreign-earned profits will serve to strengthen America’s competitiveness and help get our economy back on track.”

National Association of Manufacturers: “We applaud Chairman Camp for taking steps toward this important reform in a thoughtful and deliberative manner. We look forward to reviewing the proposal with our members and providing input to the committee on a proposal that will allow worldwide American companies to be more competitive. If U.S. companies cannot compete abroad, where 95 percent of the world’s consumers are located, the U.S. economy will suffer from the loss of both foreign markets and domestic jobs that support foreign operations.”

National Retail Federation: “This is a major step forward in drafting a simpler and fairer tax system that would ultimately help create jobs for American workers. Retailers would see lower tax bills under this proposal and would pass much of that savings along to our customers. That would result in higher sales and more demand for merchandise that would boost jobs not just in stores but throughout the supply chain and many other sectors of the economy.”

National Foreign Trade Council: “We are very pleased to see that Chairman Camp understands the difficulty that companies face in global competition. The U.S. tax system has been the outlier in the world economy for far too long. Moving to a territorial tax system and reducing the corporate tax rate will allow companies to grow in the United States, and will also attract more in-bound investment, leading to more job growth.”

Tax Foundation: “With a new proposal by House Ways and Means Committee Chairman Dave Camp circulating this week, the prospects for major corporate tax reform are becoming stronger.”

Coca-Cola Company: “The Coca-Cola Company supports restructuring our corporate income tax system to create a 21st century tax system that is competitive with the tax systems of other developed countries and that encourages new investment in the United States. We commend Chairman Camp and his committee for establishing a transparent legislative process that encourages a meaningful dialogue on comprehensive tax reform, a model similar to that of other nations that have enacted fundamental tax reform.”

United Technologies Corporation: “UTC commends Ways and Means Chairman Dave Camp’s leadership in putting forth a detailed international tax reform proposal for review and comment.
Comprehensive tax reform is critical as businesses plan the long term investments in innovation and technology that will drive economic recovery and job creation in this country…Inherent in the proposal released today are both a commitment to fiscal responsibility and faith in the idea that American business success around the world will mean better jobs and greater shared prosperity here at home.”

Caterpillar Inc. Group President & CFO Ed Rapp: “I applaud the draft proposal released this week and see this as a big swing at tax reform, which is much needed.  As I mentioned in my testimony before the Committee in May, I believe a move to a territorial tax system with a lower corporate tax rate will help give Caterpillar and other companies a level playing field to compete in markets at home and abroad.”

IBM:”IBM has long supported reforms that would move the United States to a more competitive and territorial corporate tax system. We applaud Ways & Means Chairman Dave Camp for significantly
advancing this policy discussion. Done right, tax reform can enhance economic growth and investment in the United States, and we stand ready to work with Chairman Camp and others as
the discussion moves forward.”