Policy - Tax Policy
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.
- Industry Statement on Digital Tax (June 25, 2018)
- U.S. Tech Associations Letter on Digital Taxes to Treasury (March 19, 2018)
- ITI Key Vote Letter Tax Reform (December 18, 2017)
- ITI Digital Tax Submission to the OECD (October 16, 2017)
Multi-Association Repatriation Letter to Treasury Secretary Mnuchin (August 11, 2017)
ITI joined a large coalition of more than 50 trade organizations from a wide-range of industries across the U.S. economy released a letter today addressed to U.S. Treasury Secretary Steven Mnuchin on the ...
As the EU Eyes Digital Taxation, Maintaining a Multilateral Approach is Critical (October 29, 2018)
Across the globe, governments are realizing that outdated approaches -- from trade agreements to privacy guidelines – no longer address the needs of the modern economy. In response, many are quickly moving ...
Tech’s Legislative Outlook for 2018: Building on 2017’s Momentum for Modernization (January 11, 2018)
The start of the 115th Congress and new administration not only marked an era of profound political change, but it also presented a unique and timely opportunity to modernize outdated policies. Lawmakers ...
Tech Industry Lays Out Tax Reform Priorities to Congress (July 18, 2017)
The United States last passed comprehensive tax reform in 1986 before anyone could conceive the transformative impact the digital economy would have on society. Businesses of all sizes are harnessing the ...
Now is the Time to Talk Tech and Tax Reform (March 09, 2017)
On Monday, ITI is hosting a tax reform conversation and the timing of this event could not be better—tax reform is a hot topic in the nation’s capital. The political alignment of the White House and Congress ...
Apple CEO: Fixing the Broken Tax Code = Jobs, Investment (May 21, 2013)
Apple's Tim Cook is testifying in front of a Senate subcommittee on what Apple sees as a vastly simpler corporate tax structure to replace the outdated, overly complex structure that the U.S. has today. ...
ITI Welcomes Ongoing OECD Work to Address Digital Taxation (January 29, 2019)
BRUSSELS – Today, ITI, the global voice for the tech sector, welcomed the Organisation of Economic Co-operation and Development’s (OECD) ongoing work to address digital taxation, following the release ...
Tech Industry: France’s Misguided Approach to Taxes Will Harm Businesses (December 17, 2018)
WASHINGTON – Today ITI, the global voice of the tech sector, in a statement from its Vice President of Policy and Market Access Jennifer McCloskey, criticized the decision by the French government to enact ...
ITI: EU Digital Tax Would Set Dangerous Precedent (October 26, 2018)
WASHINGTON - ITI, the global voice of the tech sector, released the following statement from president and CEO Dean Garfield reacting to Secretary of Treasury Steve Mnuchin’s statement on the European ...
ITI Hires Two to Grow Its Public Affairs Team (September 30, 2018)
WASHINGTON – ITI, the global voice of the tech sector, announced today that Jennie Westbrook Courts and Clare Sahin joined its public affairs team as vice president of external affairs and manager of state ...
ITI Adds New Tax Expertise to Bolster Global Advocacy and Policy Efforts (July 18, 2018)
WASHINGTON – ITI, the global voice of the tech sector, announced today that Sarah Shive and Jennifer McCloskey will join the organization. “At a time when countries around the world are grappling with ...