January 01, 2013
by San Francisco Chronicle

San Francisco is a city with an endemic dynamism enhanced by a tradition of embracing creative disruption. Given the city's cultural connection to change, it was surprising to read The Chronicle's Dec. 15 editorial, "Say no to territorial tax for U.S. corporations." The editorial argued for a failing status quo when creative disruption in tax policy is necessary. San Francisco, unlike The Chronicle, knows we can do better.

If The Chronicle intended to spur a rational debate about tax reform, it should have started with an accurate description of the tax system. It did not. For example, The Chronicle claims that the United States should maintain the system of taxing the worldwide income of corporations because previous efforts at doing something different have failed. In fact, there has been no previous effort at completely abandoning our worldwide system of taxation. There was a brief 2004 experiment that reduced taxes on a small portion of the foreign earnings of U.S.-based companies. That experiment provided some important lessons. If policymakers heeded those lessons, then the United States would not be the only major economy that maintains an antiquated approach to business taxes.

This opinion article was written by ITI President and CEO Dean C. Garfield. To continue reading, please visit the ITI blog or official San Francisco Chronicle website.