American Workers & the Economy Will Benefit from Tax Reform

Globally engaged U.S. companies contribute nearly $7 trillion to the U.S. economy, or 54 percent of U.S. economic output, and support more than 70 million jobs, or 48 percent of private-sector employment. Pro-growth policies would spur additional investment and robust job creation.

Comprehensive tax reform that includes lowering the U.S. corporate tax rate and revising international tax rules would make it more attractive for companies to invest in communities throughout the United States.

By the Numbers

The last significant overhaul of the U.S. corporate tax system was in 1986. Many of the provisions that determine how the United States taxes the foreign-earned income of its globally engaged companies date back to the early 1960s.

Only five OECD countries, in addition to the United States, tax the worldwide earnings of their global companies: Chile, Ireland, Israel, Korea and Mexico. 

28 of 34 OECD countries employ a territorial (or market-based) tax system that does not tax the worldwide earnings of their global companies.

The U.S. has the world’s highest combined statutory corporate tax rate: 39.1%.

A combined federal and state rate of 25% would create a tax rate roughly equal to that of America’s trading partners.

Tax Reform: Critical to a Healthy U.S. Economy

America’s economy has great advantages, from world-class workers and productivity to unparalleled institutions of higher education and abundant domestic energy supplies. However, our corporate tax code is a distinct disadvantage that holds us back.

America’s ability to compete in the global marketplace is undermined by a decades-old tax policy playbook and an uncompetitive corporate tax rate that stands in the way of domestic job creation, discourages business investments and thwarts economic growth.

Making America’s economy stronger, healthier and more competitive is an urgent priority.

Learn More

Lower the Tax Rate

Currently, the U.S. has the highest average combined corporate tax rate (state and federal) of any nation in the developed world.

Reducing the corporate tax rate to 25% would make the United States a more attractive location for business investment by both U.S. and foreign companies, helping to create jobs and drive economic growth.

There is bipartisan agreement that the U.S. economy would benefit from corporate tax reform to promote a healthier economy and create jobs.

End Double Taxation

The U.S. is now the only G-8 country to use a “worldwide” tax system, which collects taxes on the earnings of foreign subsidiaries when they are brought back to the United States. America’s unusual and outdated approach puts globally engaged U.S. companies at a significant disadvantage when selling goods and services in international markets, discouraging domestic investment and job creation. It’s time we unlock the potential for domestic investment by transitioning from the uncompetitive “worldwide system” to a market-based “territorial system.” Putting an end to double taxation of foreign earnings will encourage American companies to bring their earnings home, invest more in the American economy and bring more American workers off the bench and back into the game.

Resources

Press Release
Comprehensive Analysis Details Widespread Benefits to Economy, Workers and Businesses; Roundtable Says with Improvements, Camp Discussion Draft Could Produce Even More Growth
Resource
In response to widespread concerns that the income tax system in the United States is highly inefficient, unfair, unnecessarily complicated, and discourages economic growth while putting US multinational companies at a disadvantage relative to their foreign competitors, numerous proposals for sweeping reforms have been advanced in recent years.
Resource
On February 26, House Ways and Means Committee Chairman Dave Camp (R-MI) released a comprehensive tax reform discussion draft representing the most significant proposal for revamping the U.S. tax system in over 30 years.
Op-Ed
It's no secret that Americans are fed up with the ongoing conflict and gridlock in Washington. While the partisan brinksmanship over the budget and debt has ebbed of late, approval ratings remain at historic lows, and with the midterm elections looming, members should be looking for something to deliver to the country, not just their partisan stalwarts.