Ways and Means Democrats’ multi-trillion dollar tax hikes will ship U.S. innovation and jobs overseas, according to a new analysis from the Penn Wharton Budget Model (PWBM), a macroeconomic forecasting project based at the University of Pennsylvania.
To summarize their findings:
“We project that recent tax reforms proposed by the House Ways and Means Committee would increase the incentive of U.S. firms to shift intangible investments and profits to foreign countries with a tax rate below 20.7 percent.”
Congressional Democrats’ tax plan would increase shifting profits overseas, shrink tax revenues, and reduce U.S. R&D investment and jobs.
Democrats’ plan discourages development of new technologies that will stay here in the United States.
- Republican tax reform in 2017 resulted in an R&D boom – R&D spending increased by 25 percent to a new record high, creating new good-paying jobs and higher wages.
- As businesses brace for Democrats’ $2 trillion tax increase, some companies are signaling that they’ll have to cut billions in R&D – a huge risk to American jobs, wages, and our competitiveness.
- Ways and Means Republicans also called on Treasury Secretary Yellen to preserve FDII, to keep valuable technologies in the United States and discourage tax-motivated offshoring.
The Biden Administration should not surrender jobs, growth, or tax revenues to other countries in order to advance a partisan tax increase agenda at home.