WASHINGTON, DC — Today, Senators Rob Portman (R-OH) and Charles Schumer (D-NY) released a report outlining a bipartisan framework for the taxation of foreign earnings by U.S. companies. In response, House Ways and Means Committee Chairman Paul Ryan (R-WI), who has spoken about the need for such reform, issued the following statement.
“Our entire tax code needs to be fixed. High rates and complexity hurt American families and small businesses. Our corporate tax code is crammed with market-distorting carve outs. And the way we tax American businesses selling goods and services abroad is leaving trillions of dollars of capital sitting overseas. The damage is not theoretical: Our tax code is costing us jobs, depressing wages, and chasing companies out of the United States.
“Unfortunately comprehensive reform is not possible under a president who wants to raise taxes on families and job creators. That does not mean, however, we cannot work to find common ground as a first step toward tax reform. That’s why I applaud Senators Portman and Schumer for producing a bold, bipartisan framework for updating the way we tax American companies doing business in other countries.
“We are nearly alone in the world in the way we punish foreign earnings of U.S. businesses. By moving to an exemption system, much-needed capital that’s stuck in foreign countries could come back to the United States, and we could create a level playing field for American businesses. The innovation box in their plan would help us compete with other nations that are trying to lure away our intellectual capital and research and development income. And responsible anti-base erosion rules could help address the foreign tax havens that threaten our ability to develop the kind of fair and competitive system we all want. I’m also pleased that their plan recognizes that a one-time tax on the repatriation of earnings stuck abroad makes sense only in the context of the kind of broader structural changes that they have proposed.
“Fixing our international tax system is an urgent task. Without action, more and more American companies will move elsewhere, eroding American jobs and our corporate tax base. These ideas could serve as the basis for a bipartisan package to stem the tide of inversions and takeovers, advance important permanent tax extenders, and potentially unlock a solution to our highway trust fund shortfall. I look forward to discussing these ideas with my House and Senate colleagues and, ultimately, moving us toward a fairer, flatter, more competitive American tax code.”