The Senate Finance Committee asked a series of corporate executives about whether they could accept the loss of some corporate tax breaks in exchange for lower overall business tax rates.
For the most part, they said yes.
Among them was Wal-Mart president and CEO Mike Duke. "If the result is comprehensive reform, we support getting rid of existing incentives that currently benefit some industries over others," he said at hearing in late July. "In fact, we will give up the existing incentives that benefit us, if it means getting rid of them all in a simplified, more competitive, and territorial system. Taking these steps to reform America's Tax Code will help American companies compete abroad."
Duke noted that foreign competitors have an advantage by paying less in corporate income taxes than Wal-Mart. "Corporate tax rates have been steadily falling internationally, but the U.S. is out of step," he said. "The average rate in developed countries is 25.1 percent, compared with 39.2 percent in the U.S. We need a rate that is meaningfully lower in order to spark investment and job creation."
Thomas J. Falk, chairman and CEO of Kimberly Clark, agreed: "The U.S. system of corporate taxation puts American companies and the American economy at a disadvantage when competing in the global marketplace," he said. "The combination of a high statutory tax rate, taxation of worldwide earnings, and the complexity of our tax rules creates an uncompetitive tax environment for U.S.-based companies and discourages investment in the U.S. economy."
He added that the complexity of the U.S. international tax system puts U.S.-based multinationals at a disadvantage against global competitors.
"The current complexity of the U.S. Tax Code requires U.S. companies to devote significant resources to ensure compliance," said Falk. "The time and money spent on those activities takes away resources that could be spent on product innovation, job creation and market-growing activities. American businesses need a tax system that reduces the cost of administration, is stable and predictable, reduces the risk of error, and is easier to monitor."
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access