The verdict at today’s Ways and Means Committee hearing was unanimous: when it comes to America’s international tax code, the status-quo isn’t helping the American people. And until Congress leads on this issue, Americans will continue to lose their jobs to our global competitors.
In the first two months of this year alone, three major American companies have made the decision to move abroad, causing a negative impact that will ripple throughout the economy and shatter local communities.
When Chairman Kevin Brady (R-TX) asked what happens when global companies move overseas, expert witness Raymond Wiacek described the devastation cities like Detroit face as a result of foreign mergers and takeovers. Reflecting on the legacy of several American automakers in his hometown, Wiacek said:
“Michigan was an unbelievable state. It had more recreation and more tool and dye companies and more suppliers than anybody. And those places are all gone … We can’t lose another round of companies. Maybe we’re not going to be big in the auto industry anymore, but we’re big in tech now, and we’re big in pharma now, and we’re big in branded products like Starbucks, and we can’t lose those companies too. And they’re all under threat.
When Rep. Diane Black (R-TN) asked how continuing to prevent U.S. companies from competing globally will impact future generations, Georgetown Law Professor Itai Grinberg expressed concern about the impact on American workers:
“Over time there will be corporations that migrate offshore or are incorporated offshore to start, and more and more of their high skilled opportunities will be staffed abroad, as they have headquarters abroad and as the leadership of those companies makes decisions about where they want to have small and medium business suppliers, for example. They’ll be in Europe, not in the United States. And as a result, I really do fear there will be fewer opportunities for younger people in the U.S.”
Wiacek added:
“We better figure out for our communities and our country what’s happening and why we’re losing. And one of the reasons we’re losing is that we have a noncompetitive tax system.”
Summarizing what he heard from the witnesses, Rep. Peter Roskam (R-IL) remarked:
“Nobody is defending the status quo. There’s no voice here on the dais or among the witnesses. Nobody is saying, ‘Oh it’s great. Just leave it alone.’ … Everybody is communicating a sense of urgency about this.”
Moving forward, Chairman Brady said:
“The first step we can take toward overall pro-growth tax reform is to permanently lower the tax gates to allow our U.S. companies to bring their profits back home to invest in our communities, in our jobs, in our research and development, in growth.”
Ways and Means Republicans are committed to advancing a simpler, fairer, flatter tax code that will create jobs, increase paychecks, and expand opportunities. International tax reform is an important component of our plan for comprehensive, pro-growth tax reform.