Sixteen CEOs from large companies are urging Congress to enact comprehensive tax reform that would end a tax on domestic production and make companies in the United States more competitive globally.
CEOs from companies such as Dow Chemical, Pfizer, Caterpillar, Boeing, and General Electric have written a letter to Speaker of the House Paul Ryan (R., Wis.) and Sen. Chuck Schumer (D., N.Y.) urging them to make the U.S. tax code more pro-growth and lower rates for businesses so they can actively compete with global competitors.
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"We recommend enacting comprehensive pro-growth tax reform to remove a major impediment to economic growth—our outdated tax code," the CEOs said. "We have the highest business tax rate in the developed world and are one of the few countries that taxes business income on a worldwide basis."
"At a time when other countries have lowered their tax rates and enacted territorial taxation to attract investment and create jobs, the U.S. tax code continues to stand still," they wrote. "Our tax code also penalizes American workers who make products or provide services sold abroad, while favoring their international competitors."
In their letter, the CEOs touted the benefits of the House GOP's tax reform plan, known as "A Better Way," which has been championed both by the speaker of the House and Ways and Means Committee chairman Rep. Kevin Brady (R., Texas). They say the plan would lower taxes for all business, free up capital for companies to invest in America, protect American jobs from foreign competition, and stop corporate inversions and acquisitions of U.S. companies.
"A critical element of the House blueprint is the provision that ensures goods and services produced abroad face the same tax burden as those produced in the United States," the letter said. "This reform is consistent with the tax policies of nearly every other country in the world, and it would effectively end the ‘Made in America' tax that creates an unfair advantage for foreign-based companies at the expense of U.S. jobs and economic growth."
According to a recent report from the Office of Tax Analysis, a destination-based cash flow tax system like the one House Republicans are proposing would improve simplicity, increase economic growth, and help reduce income inequality.
Speaker Ryan cited a Tax Foundation report that found if the House GOP plan were implemented, the United States' international competitive rating would move from rank 31 to 3—just behind Estonia and New Zealand.
"America has the worst tax code in the industrialized world," Ryan said. "It is killing economic growth. It is driving companies to become foreign companies. More and more and more U.S. companies are going to leave this country because of our tax laws."