TheHonorable Tim Scott
UnitedStates House of Representatives
1117Longworth House Office Building
Washington,DC 20515
Dear Representative Scott,
On behalf of the362,000 members of the National Taxpayers Union (NTU), I write in support of H.R.937, the “Rising Tides Act of 2011.” By significantly lowering federalcorporate tax rates and taking the first step toward a territorial system oftaxation, your legislation would indeed create a rising tide of economic prosperityand job growth that is sure to lift all boats.
America’scurrent tax system exerts a tremendous drag on the economy as businesses mustcarry around a cumbersome ball and chain consisting of heavy tax rates tetheredto double taxation. When combined with state taxes, American corporations facean average burden of nearly 40 percent, 10 percent higher than the median rate inother developed nations. Even countries like France, Sweden, and theNetherlands, which are hardly renowned for their free-market conditions, levylower corporate rates than the United States. In fact, according to “PayingTaxes 2011,” a study jointly published by the accounting firmPricewaterhouseCoopers and the World Bank Group, the United States now ranks anembarrassing 124th out of 183 countries worldwide in total tax ratefaced by a typical corporation.
Equally aspainful is the federal government’s tax treatment of business income earnedabroad. The United States is among a shrinking minority of nations that taxbusiness income earned outside national borders. Together, our outmoded“worldwide tax” system and punitive corporate tax rates create a disincentivefor businesses to bring profits earned abroad back onto U.S. shores, decreasingcapital investment and hurting economic growth. Without reform, this onerousregime 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 attractivedestination for entrepreneurs, investment, and job creators. By dropping thecorporate income tax rate from 35 percent – the second-highest in the developedworld – to 23 percent, the Rising Tides Act will attract an inflow of capital aswell as more taxable business activity to the United States. Moreover, yourbill will allow for permanent repatriation of foreign profits. Such a move wouldencourage multinational firms to bring the nearly $1.2 trillion they areholding overseas back into our economy, allowing them to invest in research,purchase new capital equipment, and hire new workers.
Our currentcorporate tax structure is in dire need of reform, and your bill ensures thatwe 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 weightedin our annual Rating of Congress.
Sincerely,
Brandon Greife
Federal Government Affairs Manager