The
Honorable Tim Scott
United
States House of Representatives
1117
Longworth House Office Building
Washington,
DC 20515
Dear Representative Scott,
On behalf of the
362,000 members of the National Taxpayers Union (NTU), I write in support of H.R.
937, the “Rising Tides Act of 2011.” By significantly lowering federal
corporate tax rates and taking the first step toward a territorial system of
taxation, your legislation would indeed create a rising tide of economic prosperity
and job growth that is sure to lift all boats.
America’s
current tax system exerts a tremendous drag on the economy as businesses must
carry around a cumbersome ball and chain consisting of heavy tax rates tethered
to double taxation. When combined with state taxes, American corporations face
an average burden of nearly 40 percent, 10 percent higher than the median rate in
other developed nations. Even countries like France, Sweden, and the
Netherlands, which are hardly renowned for their free-market conditions, levy
lower corporate rates than the United States. In fact, according to “Paying
Taxes 2011,” a study jointly published by the accounting firm
PricewaterhouseCoopers and the World Bank Group, the United States now ranks an
embarrassing 124th out of 183 countries worldwide in total tax rate
faced by a typical corporation.
Equally as
painful is the federal government’s tax treatment of business income earned
abroad. The United States is among a shrinking minority of nations that tax
business income earned outside national borders. Together, our outmoded
“worldwide tax” system and punitive corporate tax rates create a disincentive
for businesses to bring profits earned abroad back onto U.S. shores, decreasing
capital investment and hurting economic growth. Without reform, this onerous
regime will hurt our ability to compete in the globalized economy.
If passed, H.R.
937 would take much-needed steps to ensure America remains an attractive
destination for entrepreneurs, investment, and job creators. By dropping the
corporate income tax rate from 35 percent – the second-highest in the developed
world – to 23 percent, the Rising Tides Act will attract an inflow of capital as
well as more taxable business activity to the United States. Moreover, your
bill will allow for permanent repatriation of foreign profits. Such a move would
encourage multinational firms to bring the nearly $1.2 trillion they are
holding overseas back into our economy, allowing them to invest in research,
purchase new capital equipment, and hire new workers.
Our current
corporate tax structure is in dire need of reform, and your bill ensures that
we remain competitive in the global economy. For that reason, NTU endorses H.R.
937 and any roll call votes on this legislation will be significantly weighted
in our annual Rating of Congress.
Sincerely,
Brandon Greife
Federal Government Affairs Manager
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