Witnesses Say Tax Code Hinders U.S. Business, Suggest Reforms
At a May 12, 2011 hearing, various witnesses from the private sector, the Congressional Research Service, academia, and a law firm testified at a House Ways and Means Committee hearing on whether the current structure of the tax rules reduces U.S. employment and hampers efforts of U.S. companies to compete in global markets. The hearing also addressed whether comprehensive tax reform might create economic and job benefits.
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Witnesses Recommend Lower Tax Rate, Territorial System, IPR Incentives
The witnesses testified that the current tax code hinders U.S. companies and puts U.S. multinational corporations at a disadvantage. Many of the witnesses proposed changes to the tax code to help U.S. companies become more competitive. Among the changes recommended by the witnesses were:
- Lower the corporate tax rate (which they say is one of the highest corporate tax rates in the world) and eliminate loopholes;
- Implement a territorial (or source-based) tax system which would exempt foreign source income of U.S. firms (like most other industrialized nations); and
- Provide incentives for development and retention of intellectual property, such as making the R&D tax credit permanent.
(These recommendations are in line with recommendations made by the President’s Export Council (PEC) for increasing U.S. exports. See ITT’s Online Archives or 12/16/10 news, 10121626, for BP summary of PEC recommendations for tax reform.)
Written comments for the hearing record are due by May 26, 2011.