ACT Weighs in with Big 6 on Critical Elements of Tax Reform to Strengthen U.S. Economy, Achieve Global Competitiveness
WASHINGTON – The Alliance for Competitive Taxation (ACT), a coalition of leading American businesses, today released a set of priorities for competitive tax reform shared with leaders in Congress and the Administration.
As the members of the “Big Six” – House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, House Ways and Means Committee Chairman Kevin Brady, Senate Finance Committee Chairman Orrin Hatch, Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn – develop a framework for tax reform, ACT provided a benchmark for an internationally competitive tax system for the U.S. based on the tax systems of other developed countries, and explained why a competitive tax system is critical for job creation and investment in America.
Specifically, the coalition believes a globally competitive tax system would include:
- A 20% or lower federal corporate tax rate.
- A modern territorial tax system aligned with all other G7 countries.
- A tax base that defines income in a manner similar to other “best in class” tax systems and allows a full deduction for ordinary and necessary business expenses. Limitations on interest expense, for example, should follow the international norm of “thin cap” rules rather than an across-the-board disallowance.
In the policy paper, the coalition explains that successful tax reform would eliminate any tax incentive for a business to be owned by a foreign company rather than a U.S. company, thereby putting a halt to tax-motivated foreign acquisitions of U.S. companies and divisions, inversions, and new start-ups abroad.
The coalition also explained the benefits of reform for workers, businesses and our economy, noting: “A globally competitive tax system will lead to greater U.S. investment and U.S. headquartering by global companies; higher wages, greater employment opportunities and increased living standards for American workers; and increased ongoing economic growth.”
Click here to view the complete paper.
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ACT is comprised of leading American businesses that employ millions of American workers from a broad range of industries, including technology, manufacturing, and services. ACT members support comprehensive tax reform that provides a competitive corporate tax rate and modern international tax system that aligns the United States with the rest of the world. We believe tax reform should simplify the tax code, promote economic growth, and should be fully paid for by ending tax breaks and preferences. For more information about ACT, visit www.ACTonTaxReform.com.