As I watched a bit of football the other day, it made me wish that we had a yellow flag for policy setting in this country. If that were possible, I would throw the flag at our policymakers for failing to fix an out-of-date, broken tax system and at our national media for their off-base characterizations of those simply trying to work within the system.
Our tax code is atrocious. It is antiquated, filled with complex exceptions that create compliance costs, and erects financial barriers that drive away investment in the United States. Yet, some policymakers and the media find it easier to attack those who are seeking to abide by the law, ensure their companies remain competitive and innovative, and, in fact, are pushing for real reform.
Rather than castigating our national economic champions -- who are creating hundreds of thousands of jobs and paying billions in taxes -- let’s change the rules to make them work for the benefit of our country and our economy.
Let’s begin by setting the right tax policy, a step which has the greatest potential to unleash unprecedented growth. Both parties agree we must scrap the current corporate code, which has the job-killing combination of complexity, high rates, and low returns.
There is wide agreement that we must simplify the system, reduce the rate, and broaden the base by eliminating much of the nearly trillion dollars in deductions and credits.
But, there are additional steps we must take to adjust tax policy so that the U.S. can benefit from the global, interconnected nature of our economic system. Today’s tax code punishes U.S. companies that are successful at developing globally popular products, and that then establish a beach-head to better sell their products and services overseas. We are long overdue in creating a better tax code that serves as an instrument for incentivizing companies to invest more of their foreign-earned profits at home.
Overwhelmingly, the trend is in that direction -- to compete globally and invest locally. Most developed economies have already concluded that they should be helping to make their local champions more successful across the globe and those countries have responded with tax systems that are market-based -- they tax locally but not globally.
The case for having our U.S. champions play by similar rules is strong. The Tax Foundation noted that “every independent U.S. advisory board, working group, and federal agency tasked with exploring tax reform has recommended that the U.S. pivot toward such a [market-based] system,” including majorities of the President’s Economic Recovery Advisory Board, the President's Council on Jobs and Competitiveness, the so-called Simpson-Bowles Commission, and the President’s Export Council.
The tech sector is an American success story that is poised to be on a winning streak that would benefit the U.S. economy more broadly. That is why we strongly support tax reform. We know that the entrepreneurial ecosystem in the United States is second to none and is positioned for further growth. There is breakthrough work taking place right here on cloud computing, mobility, and data analytics that together will create real opportunities for the U.S. to once again become the most attractive destination for jobs -- manufacturing and otherwise.
We in the tech sector are committed to doing our part. That’s why we are focused on fixing the tax system for the betterment of the game. Rather than attacking our players, it is critical that we throw down the gauntlet to our international competitors and implement a winning tax reform formula for America’s economy.