New York, N.Y., February 23, 2012 – The United States Council for International Business (USCIB) is pleased to see that President Obama’s proposals on business tax reform advocate lower rates and a more efficient corporate tax system. USCIB appreciates the recognition by the President and the Treasury Department that tax reform will take time, require work on a bipartisan basis, and benefit from additional feedback from stakeholders and experts. We and our members hope to make a positive contribution to that debate.
USCIB is, however, disappointed by the international aspects of the president’s proposals on business tax reform. USCIB President and CEO Peter M. Robinson stated: “The international provisions fail to recognize that U.S. business competes for customers in the global marketplace. While most countries have adopted territorial systems seeking to facilitate the competitiveness of their multinationals by taxing income only where it is earned, the U.S. is going in the opposite direction. By proposing a minimum tax on foreign earnings, a tax on so called ‘excess profits’ and the disallowance of interest expense, the administration proposes a step backwards.”
Mr. Robinson continued: “A minimum tax on foreign earnings will simply make American firms less competitive than foreign based multi-national enterprises. Further, the likely response in the marketplace is to make the U.S. a less favored jurisdiction for establishing the headquarters of a multi-national business. Who would choose to set up their business in the U.S. knowing that global expansion would result in a minimum tax? Companies currently headquartered here may not have many options, but anyone advising a new entity would certainly suggest establishing foreign control from the outset. These tax policies could have a role in the acquisition of American companies by foreign competitors. When companies are successful in global markets, it means new jobs in their home countries to support those global business opportunities. Discouraging U.S. headquarters will result in fewer American jobs.”
USCIB promotes open markets, competitiveness and innovation, sustainable development and corporate responsibility, supported by international engagement and prudent regulation. Its members include top U.S.-based global companies and professional services firms from every sector of our economy, with operations in every region of the world. With a unique global network encompassing leading international business organizations, USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade and investment. More information is available at www.uscib.org.