In the 1960s, 18 of the world’s largest companies built their headquarters in America. Today, only six of the world’s 20 largest non-financial companies have chosen to be headquartered in the U.S. This alarming trend serves to highlight the problems of an antiquated U.S. corporate tax system that is driving capital investment out of America and into the hands of our foreign competitors.
We live in a worldwide marketplace; it’s time America had a world-class tax system that helps to spark new jobs and new industries across the country.
ITI advocates for tax reform that levels the international playing field. We consistently have urged the federal government to enact a tax system that makes America more competitive and a magnet for job creation and business investment. In working with Congress, ITI seeks to lower the corporate rate in a fiscally responsible manner, move to a territorial system that keeps job creators from being taxed twice on their earnings, and make permanent incentives for breakthrough research and development. These pillars will help to spark job creation and innovation throughout the U.S. economy.
The U.S. is the only large economy with both a worldwide tax system and a high corporate tax rate – in fact, the highest corporate rate in the world. Lowering the rate to 22 percent would bring the U.S. in line with foreign competitors. It also would be a major boost for small businesses across the country. Right now, American companies operating globally directly sustain more than 22 million U.S. jobs and 41 million jobs indirectly. They buy $3 billion in goods and services from small businesses here at home, with a cumulative impact of more than $1.52 trillion. Lowering the tax rate would only strengthen the partnerships between large and small businesses, putting more people to work and generating new opportunities for the country.
Shifting from a global to a territorial tax system will relieve American companies from double taxation and harmonize our tax system with the majority of the developed world. Currently, earnings by a U.S. company abroad can be taxed twice: first, by the foreign country where the sales took place; and, second, by the U.S. government when the earnings come home. This double taxation creates a disincentive for U.S. companies to bring those earnings home and invest them here. A territorial system prevents double taxation, gives the economy a much-needed boost, and puts U.S. companies on the same competitive level as many of their foreign competitors.
Finally, research-and-development innovations lead to new patents, products, and jobs. Since it was created in 1981, the R&D tax credit has a proven track record of stimulating U.S. investments, wage growth, consumption, and exports. Yet, the U.S. has allowed innovation incentives to lapse completely. It’s time to encourage breakthrough technologies to create new industries and jobs.
To secure our economic future and innovative leadership in the global marketplace, the U.S. must introduce tax policies that allow American companies to compete globally. Without such policies, America will no longer be an attractive place to start and grow a business. For these reasons, ITI urges Congress to support investment in U.S. technology and innovation by passing legislation that will improve the competitiveness of the U.S. high-tech sector, as well as U.S. businesses generally.
ITI section 385 comments to IRS (July 07, 2016)
ITI comments to IRS regarding new section 385 tax rules proposals submitted on 7-7-2016
Technology Sector Presidential Platform Letter (May 04, 2016)
Technology Sector Presidential Platform Letter
House Extenders Key Vote Letter (December 16, 2015)
ITI sent letter to members of the House of Representatives, throwing its strong support behind the Protecting Americans from Tax Hikes (PATH) Act that makes the research and development (R&D) tax credit ...
- ITI IP Act Comment Letter (September 29, 2015)
- ITI Key Vote Letter to House of Reps on HR 880 R&D (May 19, 2015)
Arguing Against ‘Deeply Troubling’ European Commission Tax Actions, US Implores the Europeans to Return to Multilateral Tax Conversation (August 25, 2016)
The months long debate between the U.S. government and the European Union (EU) regarding transatlantic tax policy took another turn this week with the Department of the Treasury further clarifying its ...
New Section 385 Rules Could Inject More Dysfunction into a Broken Tax System (July 07, 2016)
Today, ITI submitted comments to the IRS on the most significant change in tax policy proposed in decades. The rules in question relate to how our member companies track and classify inter-party loans ...
Don’t Squash the Innovation Box Idea (March 15, 2016)
Appearing before the International Tax Policy Forum and Georgetown University Law Center Conference late last week, Jason Furman, Chairman of the President’s Council of Economic Advisors, threw cold water ...
Takeaways on the House Ways and Means International Tax Hearing (February 25, 2016)
International tax policy has been a hot topic inside the Beltway since last year. With all the talk, policymakers and stakeholders alike have wondered what’s in store for 2016 and beyond. While passage ...
Tech’s 2016 Congressional Agenda: How to Promote Innovation & Economic Growth (February 12, 2016)
Previously I wrote that 2015 was predicted to be a year of gridlock, and yet despite deep partisanship in the nation’s capital, the tech sector saw several of our priorities passed into law. If lawmakers ...
Tech Comes Out Against Reported European Commission’s ‘State Aid’ Tax Decision (August 29, 2016)
WASHINGTON – The Information Technology Industry Council (ITI), the global voice of the tech sector, released the following statement today by President and CEO Dean Garfield regarding today’s reports ...
Tech Unites to Offer First-Ever Innovation Platform to Presidential Candidates (May 04, 2016)
WASHINGTON – As the Republican and Democratic Presidential conventions draw near, the Information Technology Industry Council (ITI), the global voice of the tech sector, joined with a dozen technology ...
ITI Welcomes Taxpayer Protections Passed by the Senate Finance Committee (April 20, 2016)
WASHINGTON – The Information Technology Industry Council, the global voice of the tech sector, released the following statement by Senior Vice President for Government Affairs Andy Halataei following a ...
Tech Sector Considers PATH Act Making R&D Tax Credit Permanent a Key Vote (December 17, 2015)
WASHINGTON – Today the Information Technology Industry Council (ITI), the global voice for the technology sector, voiced strong support for the Protecting Americans from Tax Hikes (PATH) Act, which would ...
Tech Sees Big Wins for the Economy in Omnibus Package with R&D Tax Incentives (December 16, 2015)
WASHINGTON – The Information Technology Industry Council (ITI), the global voice of the tech sector, says it sees a big win in the tax legislation unveiled today for speeding along innovations and growing ...