Not much seems to be working right with our tax system these days. But as the White House and congressional leaders prepare for a top to bottom (and long overdue) overhaul of our increasingly complex tax code, it is important to not lose sight of what is most essential: comprehensive tax reform for the benefit of all Americans.
A good place to start is with our current system of international taxation, which is failing the American people by stifling our economic competitiveness and our ability to attract investment in the 21st century:
• America stands virtually alone among major economies who maintain an international system that taxes domestic companies when they bring home profits earned internationally.
• The U.S. now has the highest statutory and effective corporate rates in the world.
• In 1960, U.S.-headquartered companies comprised 85 percent of the world's largest companies. Today, only 30 percent of American headquartered companies are ranked in the top 20.
Furthermore, as America has stood still on reform, our international competitors have aggressively adopted modernizations in order to attract global investment and spur economic growth in their home countries.
Fortunately, Senate Finance Committee Chairman Max Baucus (D-MT) and House Ways and Means Committee Chairman Dave Camp (R-MI) have made comprehensive tax reform a bipartisan legislative priority. This spring they released a website, TaxReform.gov, and Monday announced the launch of a nationwide tax reform listening tour in an effort to collect input from Americans on how best to reform our outdated tax code.
Both chairmen understand the importance of enacting a modern international tax system, along with a lower corporate tax rate. Couple those reforms with clear and manageable standards to prevent tax abuse and the United States will be well on its way to solidifying its role as being the best place to hire and invest in the world.
There is no question that comprehensive reform that includes updating our international tax rules will be difficult in today's political environment. But promising steps have been taken to begin the long process. The Senate Finance Committee's zero-based approach and call on colleagues to provide reform proposals is encouraging and reflects the bipartisanship needed to move past the status quo.
After a half century of inaction, the time for reform has arrived. Our foreign competition in the global marketplace doesn't wait for Washington to act, and nor should American companies and workers. Our frustration is bipartisan and the solution can be too.
Rep. Camp and Sen. Baucus have set the pace; it's time for Congress and the White House to follow and move forward with tax reform.
Let's Invest for Tomorrow (LIFT) America is a coalition of U.S.-headquartered companies, trade associations and economic stakeholders representing industries that are critical to the American economy. To strengthen American competitiveness in the global marketplace, the coalition supports a modern, hybrid international tax system - similar to the one used by our trading partners - that would promote increased U.S. investment, while protecting America's tax base.