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Editorials and Op-eds

July 9, 2010 - Wall Street Journal (Op-Ed), "America's Growing Innovation Gap," John Lechleiter, President and CEO, Eli Lilly and Company
The Senate continues to debate tax legislation already passed by the House that could prove pivotal for America's innovative companies. While the legislation would extend the R&D tax credit, the bill also includes international tax revenue raisers that will hurt the U.S. economy and deplete American jobs. These taxes further exacerbate the problems with our corporate tax system, which is already out of step with the rest of the world.

June 21, 2010 - Wall Street Journal (Editorial), "Japan's Corporate Tax Breakout"
Japan's corporate tax cut, if approved by parliament, would leave the United States as the developed world's high-tax champion, with a 39.2% corporate rate (combined federal and state average). That ought to alarm even the Obama Administration, which is still proposing to raise taxes on U.S. businesses by eliminating tax credits on foreign-earned income. Companies wouldn't need those credits if the U.S. corporate rate were competitive.

June 3, 2010 - NDN.org (Op-Ed), “Some Hard Truths About Globalization and Jobs,” Robert J. Shapiro, Chair of the Globalization Initiative, NDN
The reason that our tax system has provided this tax “deferral,” for nearly as long as we’ve had a corporate income tax, is that America is nearly the only major country that taxes its businesses on their worldwide income, regardless of where it’s earned.

March 16, 2010 - The Hill (Op-Ed), "U.S. Firms Doing Business Abroad Pay Fair Tax Share," Rep. Patrick Tiberi (R-OH)
If you have followed the discussion surrounding tax reform over the past year, you are familiar with a favorite talking point of those seeking to raise taxes in the name of fairness: American companies need to pay their fair share. Less than one year ago, President Barack Obama submitted tax proposals in his first budget proposal to Congress. Front and center were a number of initiatives under the heading “Reform U.S. International Tax System.”

November 6, 2009 - Washington Times (Op-ed), "Chasing Out the Multinationals," Robert J. Herbold, Managing Director, Herbold Group LLC; and Scott S. Powell, Managing Director, AlphaQuest LLC and Visiting Fellow, Hoover Institution
[R]ecently the Obama administration proposed taxing the foreign profits of U.S.-based multinationals even when those profits were not repatriated, but backed away under pressure from executives who threatened to move offshore.... Washington needs to wake up and see the big picture. Now more than ever, it is all about keeping and creating jobs. We can't afford to chase multinational corporations out of the United States.

October 15, 2009 - Wall Street Journal (Editorial), "In Praise of Lobbyists"
The idea that raising corporate taxes would promote job creation never made sense, and the mere threat of higher taxes is one factor depressing business investment and slowing any recovery. So it's good news that the Administration seems to have set this job-killer aside, at least for now.

October 13, 2009 - Reuters Blog (Op-ed), "Deferral Drama: Why Obama Corporate Tax Reversal Hints at a VAT," James Pethokoukis, Columnist, Reuters
...Not only would the tax plan hurt American corporate competitiveness (most other countries don’t tax their companies’ overseas profits), the changes would be a de facto $20 billion-a-year tax increase on business during a time of profound economic weakness. Bottom line: the tax changes were in no way incentives to add American jobs at a time when unemployment is climbing toward 10 percent. In this case, wealth and job creation trumped wealth redistribution and revenue raising.

September 12, 2009 - Idaho Statesman (Op-ed), "Obama's Tax Plan Would Have Dire Consequences," Ronald M. Nate, Economics Professor, BYU-Idaho
President Obama wants a change in U.S. corporate tax policy that would make it more expensive for U.S. firms to locate abroad. He claims it will protect U.S. jobs from being sent overseas while simultaneously increasing tax revenues. Unfortunately, the president's proposal would be disastrous; in fact, it would lead to more job losses and would reduce U.S. tax revenues.... Let's not be fooled by the confusing rhetoric of referring to the policy as a way to close loopholes or eliminate tax havens. The only things it closes are U.S. business doors (here and abroad), and the only things it eliminates are U.S. jobs and incomes.

August 9, 2009 - Elmira Star-Gazette and Binghamton Press & Sun-Bulletin (Editorial), "Doing Harm to Business"
At a time when U.S. businesses are trying to endure the ravages of a worldwide recession, the last thing they need is for Congress to be slicing into their overseas operations and reducing or eliminating a tax deferral that now makes it possible for those businesses to compete with foreign companies already enjoying lower corporate tax rates in their own countries....The administration's worries about paying for important changes such as health care reform are legitimate, but trying to balance the books on the shoulders of U.S. companies with worldwide operations will only hurt American workers and investors who already have their backs against the wall. This proposal should be dumped before it even gets to Capitol Hill. It's bad for business.

August 3, 2009 - Arkansas Business (Editorial), "Tax Deferral"
The Obama proposal to cut out or cut back tax deferral would mean a huge tax increase for American businesses with overseas operations – a total tax burden of 50 percent on foreign operations in some cases....Arkansas’ multinational firms – as well as those all across the nation – shouldn’t be penalized for doing business in lower-tax countries with competitive tax systems. We live in a day with a global economy. The government should not be discouraging businesses from seeking opportunities around the world.

July 24, 2009 - Sacramento Bee (Op-ed), "Ending Tax Deferral of Overseas Income Slaps U.S. Firms with Hugh Tax Hike During Recession," Thomas J. Donohue, President and CEO, U.S. Chamber of Commerce
President Obama's recent proposal to increase taxes on foreign earnings of U.S. corporations ironically would jeopardize his own plans to revitalize our slumping economy and put struggling Americans back to work.... If we want to make American companies less competitive in worldwide markets, drive up consumer prices, and cause domestic job loss, then limiting deferral is the way to go. But if we want to keep American companies competitive and spur economic growth, limiting deferral is not the answer. As it seeks a path back to prosperity, Congress shouldn't look at deferral as a dirty word.

July 20, 2009 - Fairfield County Business Journal (Op-ed), "Don't Tax Business to Fix the Economy," Ward L. Thrasher, Assistant Dean and MBA Director, University of Bridgeport
[O]ur leaders need to find a way to finance their spending without penalizing those who have effectively negotiated the risks of building a successful business or career.... [P]articularly damaging is a federal proposal to remove tax benefits that help American multinational companies compete in lower-cost foreign markets.... While this approach has political expediency, it fails to provide holistic solutions to bring real and lasting positive reform, identifying sustainable sources of revenue, which add to and are derived from, rather than suppress and curtail, American economic activity.

July 16, 2009 - Roanoke Times (Op-ed), "Proposal Could Cripple Corporations," Hugh Keogh, President, Virginia Chamber of Commerce
[A] current tax proposal before Congress would stall the progress of U.S. companies operating overseas, ultimately causing salary decreases, job loss and declining investment in Virginia and across the country. In a time when America needs to be united in its efforts to restore our economy to vibrancy, this proposal -- the elimination of federal corporate income tax deferral on revenues generated abroad -- would erect new obstacles to entrepreneurial success.

July 16, 2009 - Tacoma News Tribune (Op-ed), "Tax Codes Shouldn't Stifle Competitiveness of U.S. Companies," Jon Hemingway, CEO, Carrix Inc.
Under the guise of “closing tax loopholes,” Congress is now eyeing tens of billions of dollars in new taxes – even though these “loopholes” are legitimate deductions and allow companies like mine to employ at home to compete abroad.... To keep good jobs and decent wages here in America, we must ensure that the U.S. tax code keeps worldwide American companies competitive both at home and abroad.

July 16, 2009 - Fortune Brainstorm Tech (Op-ed), "New Tax Threatens U.S. Recovery," John Chen, Chairman and CEO, Sybase, Inc.
The international tax modification represents not only a misunderstanding of the factors that drive the competitiveness of our economy, but also a protectionist undertone in the economic policies. When we attempt to limit the flow of investments, we hurt the confidence and prosperity of our businesses. And when that happens, we lose big time as a nation.

July 8, 2009 - Saratogian (Op-ed), "Consumers Pick Up Tab on New Taxes," Steven A. Taylor, Director of Research, Public Policy Institute
[T]his will be a tax on American-owned and operated businesses right here at home. Businesses that obey the laws, employ our residents, strengthen our communities, and also invest and do business overseas. Those overseas investments help build better companies that can use profits to provide good jobs for our working families. It seems unwise to punish and discourage any kind of growth right now.

July 6, 2009 - Arkansas Democrat Gazette (Op-ed), "Spur Job Creation," French Hill, CEO and Chairman, Delta Bank and Trust
Usually, when one hears the word "reform," it implies tax simplification and lower overall burden. In fact, America has the second highest corporate tax rate in the world, thus giving an incentive to U.S. corporations to actually move jobs and production offshore. To spur economic growth, we need to lower corporate tax burdens, not increase them. Instead, Obama has proposed raising $198 billion over 10 years by targeting American companies' overseas profits from their offshore operations. If the proposed tax "reform" is enacted, it will mean reduced profitability for these companies, leading to fewer jobs for Arkansans-for all Americans-higher prices for consumers, less state tax revenue and reduced donations for our state's charities.

July 5, 2009 - Richmond Times-Dispatch (Op-ed), "Higher Taxes Will Damage America’s Ability to Compete," John Castellani, President, Business Roundtable
For more than a century Congress has recognized the importance of keeping American companies competitive in the global marketplace, understanding that their success and growth abroad increases prosperity and creates jobs here at home. To level the playing field, Congress enacted a series of complex tax rules designed to prevent double taxation and allow American companies to compete on an equal footing with their foreign competitors. The Obama administration now wants to change the international tax rules in a way that will give foreign competitors an unfair advantage over U.S. companies in the global marketplace, allowing the foreign companies to reinvest more, expand faster, and sell products at lower prices. The administration claims it is protecting Americans against companies that export jobs; in reality, the proposal would put the U.S. increasingly out of sync with the rest of the world.

June 30, 2009 - Washington Post (Op-ed), "Higher Taxes for Business Mean We All Pay," Geoff Colvin, Senior Editor, Fortune Magazine
The bottom-line effect of the change would be a steep tax hike -- more money vacuumed out of corporate coffers. Would that make U.S. companies competing in a global economy more inclined to hire additional workers in the highly expensive United States? The answer is clear. It's why Microsoft chief executive Steve Ballmer said recently that if the change is enacted, "we're better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S."

June 21, 2009 - Las Cruces Sun-News (Op-ed), "The Wrong Target for New Taxes," Jerry Apodaca, Former Governor of New Mexico
The new U.S. tax proposal would eliminate the policies that were put in place to protect our global companies from these differences in tax burden and make us less competitive. The U.S. would stand alone with one of the highest burdens in the world. The end of these traditional tax policies would essentially amount to a $200 billion new tax on U.S. companies operating overseas. This new expenditure would mean less money to invest in expansion, less money for research and development, and less money for new jobs.

June 20, 2009 - Long Beach Press-Telegram (Op-ed), "New Tax Would Hurt U.S. Firms," Blake Christian, CPA
U.S. businesses already pay the second-highest corporate tax rate in the world. Levying an additional tax on overseas operations when our foreign competitors have no such additional tax would create a barrier to achieving economic success, inhibit American companies from competing, and further damage our weakened economy. At a time when government should be enabling the expansion of American-based businesses to as many markets as possible, this short-sighted tax proposal would fly in the face of promoting job creation.

June 19, 2009 - Connecticut Post (Op-ed), "Connecticut Companies at Competitive Disadvantage," Russell L. Abrahms, CPA
As this crucial issue emerges into a national debate, we hope policymakers will begin to understand that they should encourage economic growth or, at minimum, stop deliberately working against American job-creators. If this tax hike is set aside, we can begin to look forward to a time when American companies are allowed to compete fairly under equal conditions with their international rivals. If not, faced with a growing unfairness in U.S. tax policy, American companies will contemplate cutbacks and cost hikes to avoid slipping into red ink. Managers walk a narrow margin between profit and loss. Their ability to profit is in everyone's best interest, even the Internal Revenue Service.

June 17, 2009 - Times of Trenton (Op-ed), "Unfair Tax-Code Changes," John Galandak, President, Commerce and Industry Association of New Jersey
U.S.-based international companies unquestionably pay far more taxes than their foreign counterparts and yet continue to create far more jobs in America than they do overseas. Such a dramatic tax hike will almost certainly cause America to lose its edge in the global marketplace -- perhaps forever. We can't afford to fall behind our foreign competition, especially during these critical times. Our congressional delegation must be united in opposing the proposed tax increase in order to keep America competitive during her economic recovery.

June 15, 2009 - Denver Post (Editorial), "Tax Tweak Would Harm U.S. Firms"
U.S. companies are only able to compete abroad as it is because of a long-standing law that allows them to defer taxes on foreign profits unless those profits are returned to the homeland. Those profits that aren't returned home can be plowed back into investments at the overseas operation. If Obama and Congress strip that right, many experts say, the playing field would tip dramatically to the benefit of powerful and savvy foreign competitors. Such an environment could prove devastating to our economic base and tax base, and could make U.S. foreign subsidiaries likely takeover targets.

June 12, 2009 - Washington Times (Op-ed), "Keeping U.S. Edge Sharp," Sen. Orrin Hatch (R-UT), Sen. Kay Bailey Hutchison (R-TX), Sen Michael Crapo (R-ID), Sen. Jim Risch (R-ID)
Our high-tech sector will face even greater challenges if the administration's recent tax increases, like getting rid of deferral, are adopted for U.S. multinational firms. These proposals amount to a tax on innovation. If we want U.S. companies to be competitive globally, we should encourage them to compete internationally as well.

June 5, 2009 - Investor's Business Daily (Editorial), "Hiring Freeze"
Washington is getting the first installment of a lesson it should have already learned: If it succeeds in its plans to punish corporations for making profits, it will drive jobs out of the country....Unlike businesses based in other nations, American companies are taxed on profits they make outside the country. But a quirk in the U.S. tax code lets them bypass the levy, which can be as high as 35%, as long as the profits remain invested overseas. When the plan was made public and pitched as a way to keep jobs at home, we said right away it would lead to fewer jobs if it became law. The administration didn't heed our warning. But maybe it will listen to Microsoft CEO Steven Ballmer when he says stripping companies of the option to defer their tax liability on the profits they make offshore "makes U.S. jobs more expensive."

May 17, 2009 - Washington Times (Op-ed), "Keep U.S. Competitive," Sen. Orrin Hatch (R-UT)
Eliminating deferral is a bad idea, as the evidence shows. As of 2008, three countries still used some sort of worldwide system: Japan, Great Britain and the United States. This year, Japan and Great Britain announced plans to shift to a territorial system. At precisely this moment, then, the Obama administration is proposing a dramatic step in exactly the opposite direction....The reality is simple: If the United States wants to continue to prosper, it has to allow American business to compete. When we tax our businesses more heavily than our competitors tax theirs, our firms have the deck stacked against them in capturing the foreign markets where 95 percent of the world's consumers shop. Our jobs and standard of living will suffer.

May 13, 2009 - Politico (Op-ed), "Higher Taxes, Weaker Business," Sen. John Cornyn (R-TX)
These tax proposals would reduce American competitiveness, eliminate American jobs and further weaken the American economy...A high tax rate and a complex tax code put the United States at a competitive disadvantage, so we clearly need reform. But only some of the administration’s proposals, such as cracking down on illegal tax shelters, represent the reform we need. Others would actually make the problem worse. The administration effectively wants to eliminate the deferral of tax liability that allows U.S. businesses to compete in many foreign markets. By effectively raising taxes on income earned overseas, this proposal will make American businesses lose market share in foreign countries and force job cuts here at home.

May 13, 2009 - Wall Street Journal (Op-ed), "Tax Increases Could Kill the Recovery," Martin Feldstein, Former Chairman of the Council of Economic Advisers and Professor of Economics, Harvard University
The purpose of the tax change is not just to raise revenue but also to shift overseas production by American firms back to the U.S. by reducing the tax advantage of earning profits abroad. The administration is likely to be disappointed about its ability to achieve both goals. Bringing production back to be taxed at the higher U.S. tax rate would raise the cost of capital and make the products less competitive in global markets. American corporations would therefore have an incentive to sell their overseas subsidiaries to foreign firms. That would leave future profits overseas, denying the Treasury Department any claim on the resulting tax revenue. And new foreign owners would be more likely to use overseas suppliers than to rely on inputs from the U.S. The net result would be less revenue to the Treasury and fewer jobs in America.

May 12, 2009 - St. Louis Post-Dispatch (Op-ed), "Beware Reforming Corporate Taxes," David Nicklaus, Columnist
Obama wants to make that tax break, called deferral, less attractive. If he succeeds, critics say he will put U.S.-based companies at a competitive disadvantage. Over time, that could lead to more foreign acquisitions of U.S. companies and to the loss of American jobs. "If you end deferrals, you'll hurt U.S. sales, you'll hurt profitability and you'll definitely hurt U.S. employment," says Walter Galvin, chief financial officer of Emerson.

May 11, 2009 - Washington Post (Op-ed), "Tax Dodge Myths," Robert J. Samuelson, Columnist
Taxing overseas investment more heavily, the theory goes, would favor investment in the United States. But many experts believe his proposals would actually destroy U.S. jobs. Being more heavily taxed, American multinational firms would have more trouble competing with European and Asian rivals. Some U.S. foreign operations might be sold to tax-advantaged foreign firms. Either way, supporting operations in the United States would suffer. "You lose some of those good management and professional jobs in places like Chicago and New York," says Gary Hufbauer of the Peterson Institute.

May 10, 2009 - San Francisco Chronicle (Op-ed), "Tax-Haven Proposal is a Wrong Move," Atulya Sarin, Professor of Finance, Santa Clara University
[W]hile many other countries move to reduce taxes to make their corporations competitive globally, the Obama administration is moving in the opposite direction. And it is the wrong one...Under the guise of closing loopholes and ending aggressive practices, the administration appears to be moving toward eroding or ending the ability of corporations to defer U.S. taxes on foreign source income. These changes will reduce the resources available to the U.S. corporations and they will be forced to reduce domestic investment and employment, harming productivity, wages and benefits, corporate competitiveness and corporate valuations. That will result in less tax being collected rather than more. What's more, they will have to seriously consider selling themselves to foreign competitors, who could earn higher after-tax income on the same investment by simply changing the nationality of ownership. Do we really want to put a "For Sale" sign on corporate America?

May 9, 2009 - Virginian Pilot (Editorial), "Offshore Tax Code Needs Dose of Reform"
[C]ongress and the administration also need to be wary of unintended consequences in Obama's plan. Not surprisingly, major multinational corporations oppose the proposal. They argue, persuasively, that eliminating deferrals and other breaks for subsidiaries would undermine their ability to compete globally. Most major nations, including Japan and Great Britain, tax only profits earned within their borders. Some skepticism about the plan comes from unlikely quarters, including the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute. Critics worry the change could lead to the loss of U.S.-based jobs that support foreign subsidiaries and also encourage the sale of the subsidiaries to foreign companies.

May 9, 2009 - Chicago Tribune (Editorial), "A Bad Tax Idea"
[W]hy would Obama want to make American companies less competitive in the world? Most countries don't tax their companies' foreign profits -- and most have lower corporate tax rates than the U.S. does. The U.S. deferment exists as partial compensation for the different tax treatment by the U.S. A French company doing business in Dublin pays Ireland's 12.5 percent corporate tax rate and faces no additional French taxes. The French company can use the profits to build new plants and create jobs in France or elsewhere. But a U.S. firm doing business in Dublin pays Ireland's corporate tax rate, and then pays U.S. corporate taxes if it brings the money home for investment or a payout to stockholders. (Essentially, it pays 35 percent to the U.S., minus the taxes it paid to Ireland.) Rather than encouraging multinationals to bring that money home with the lure of lower taxes, Obama wants to hike their U.S. tax exposure.

May 9, 2009 - Buffalo News (Editorial), "Close Loopholes – Carefully"
Given the struggling economy and the added animosity toward off-shoring engendered by high domestic unemployment, the president's plan could be politically attractive. But, as in most things, the devil is in the details. In this case, the details include opposition from corporations that contend the changes also would make them less competitive internationally at a time when they -- and the jobs they provide -- need advantages...The obvious hope is that any harm to the American worker by corporations taking advantage of overseas tax regulations be rectified. The tough part is going to be making sure American corporations are not themselves harmed as they face foreign competition.

May 9, 2009 - San Jose Mercury News (Editorial), "Big Tax Increase on Global Companies is a Bad Idea"
As President Barack Obama looks for ways to jump-start the economy and fund programs he promised voters, it's no surprise that he's eying major industry to help pay the freight. Big business, including Silicon Valley's tech titans, has an interest in the success of goals such as health care reform and shoring up the nation's banks. But Obama's current proposal is no way to go about this. His plan to close loopholes and dramatically increase taxes on income that companies are holding overseas would amount to a $60 billion hit on American employers that do business globally.

May 8, 2009 - The Economist (Editorial), "Havens No More"
On May 4th Mr Obama unveiled his plans to reform the rules on taxing the foreign earnings of American firms. They came with a fusillade of rhetoric about companies “shirking” their responsibilities, and the iniquities of a “broken” tax system that rewarded firms for creating jobs in Bangalore rather than Buffalo, New York. As a “downpayment” on a “simpler and fairer and more efficient” tax system, which would also raise $210 billion over ten years, Mr Obama promised tighter rules on the taxation of businesses’ foreign earnings and a crackdown on the use of tax havens...In truth this plan is less an economic downpayment than a political one. Mr Obama needs more tax revenue, and corporate America’s foreign profits are an appealing pot of cash—particularly since Congress seems set to reject the administration’s other (sensible) plan to reduce tax deductions for richer folk.

May 5, 2009 - New York Times (Editorial), “Tax Salvos”
The Obama proposals oversimplify the challenge, both technically and politically. One of the most controversial proposals would delay deductions against overseas profits until those profits are brought back to the United States. In theory, that makes perfect sense, because matching deductions and income in the same year is a fundamental principle of United States tax law. In practice, applying the matching principle to overseas operations could put American companies at a competitive disadvantage to foreign companies that do not face United States tax laws. It could even impede job creation in the United States — exactly the opposite of what the Obama administration intends. That’s because some of the expenses incurred in generating foreign profits are for support jobs in the United States, like human resources and accounting positions.

May 5, 2009 - SmartMoney (Op-ed), "Obama's Faulty Corporate Tax Fix," Bill Bischoff, Columnist
Obama wants to reduce or eliminate the ability of big companies to indefinitely avoid U.S. taxes by leaving foreign earnings overseas...The president also wants companies to pay current taxes on overseas earnings at today’s unsustainably high 35% rate. Such a move could turn what is now a significant problem into an outright disaster by making the U.S. an even more antitaxpayer place to do business than it is already. Guess what folks? If a company reacts to this punishment by moving all its operations overseas, it won’t have to pay a dime in U.S. taxes, and it won’t need any employees in this country either. If Obama’s proposal becomes law, do you think companies are going to stick around and take it when they can easily go somewhere else? I don't think so.

April 29, 2009 - NewMajority.com (Op-ed), “Get Ready: The Coming Corporate Tax Battle,” Douglas Holtz-Eakin, Former Director, Congressional Budget Office
The reality is simple: if the U.S. wants to compete it has to allow its firms to compete. If we tax more then our competitors, our firms and their jobs will disappear. Our ability to tap the 95 percent of the world’s consumers that are in other countries will be curtailed and our standard of living will suffer.

April 28, 2009 - Hartford Courant (Op-ed), “Proposed Tax Reform Hurts U.S. Companies,” Louis Chenevert, President and CEO, United Technologies Corporation
Under current tax rules, companies doing business overseas are allowed to defer paying U.S. taxes on foreign income until it is brought back to the United States, typically as a dividend. This treatment is similar to individual owners of stock who are not taxed on the company's earnings until they receive a dividend. The administration's proposal to repeal or fundamentally change deferral, which has been part of our tax law for decades, would not affect our foreign competitors. Instead, it would impose a unilateral tax on the foreign earnings of American companies.

April 27, 2009 - Tax Notes International (Op-ed), “Japan’s Move to Territorial Contrasts With U.S. Tax Policy,” Tom Neubig and Barbara M. Angus
Japan’s recent adoption of a territorial tax system as part of a broader tax reform reduces the tax burden on the foreign-source income of Japanese multinational corporations by exempting dividends from non-Japanese subsidiaries from Japanese tax. While the tax reform package included some tighter anti-tax-haven rules, the new dividend exemption system represents a significant change in the Japanese treatment of foreign-source income. The Japanese reform is important in the context of the U.S. international tax system and President Barack Obama’s budget proposal for substantial changes in the international tax area.

April 27, 2009 - CATO @ Liberty Blog (Op-ed), “America Alone on Punitive Corporate Taxes,” Chris Edwards, CATO Institute Director of Tax Policy Studies
In Tax Notes International today, two Ernst and Young experts describe how corporate tax reforms in Japan have made America an even bigger outlier in its punitive treatment of multinational corporations… In simple terms, Japan’s reforms may give firms such as Toyota or Hitachi an advantage over firms such as Ford or General Electric in international markets. Alas, U.S. policymakers don’t seem to understand that in a globalized world of free-flowing capital we need to change our uncompetitive tax policies.

April 24, 2009 - Racine Journal Times (Op-ed), “Lead or Follow? America’s Challenge in the Global Economy,” Rep. Paul Ryan (R-WI)
Without the ability to defer taxes, a U.S. based manufacturer with foreign sales would have to pay foreign taxes and U.S. taxes on its international profits. All other industrialized countries either don’t tax the foreign operations of their domestically headquartered businesses or they allow for generous tax deferral rules precisely to avoid this form of double taxation. By eliminating tax deferral, the U.S. would severely handicap some of its most successful job-creators with a new tax burden and give an advantage to their foreign competitors.

March 29, 2009 - Cincinnati Enquirer (Op-ed), “Proposal Aimed at Saving Jobs Could Have Opposite Effect,” A.G. Lafley, Chairman of the Board and CEO, Procter & Gamble
It's hard to imagine in today's economy - at a time when investment and job opportunities in America are needed more than ever - that our own government is considering institutionalizing a 15 percent to 20 percent cost and cash flow penalty for U.S. multinational companies versus our foreign competitors. As unbelievable as it sounds, it is a scenario that many American companies, like P&G, could face if elements of President Barack Obama's budget outline are adopted. At issue is a proposal to increase taxes on U.S. companies that are competing for business in international markets. Together, these companies - along with their business partners like suppliers and retailers - provide millions of American jobs that depend on our ability to compete in the global economy.

August 17, 2008 - Washington Post (Editorial), “The Export of Jobs”
Mr. Obama's proposal would change the provision in which U.S.-based companies don't have to pay taxes on their earnings abroad until that income is "repatriated" -- brought back into the United States, for example as dividend payments. This deferral is meant to protect U.S. companies from being disadvantaged compared to foreign competitors operating under much lower corporate tax rates. However, this encourages U.S. companies to invest in foreign countries with lower taxes. It also gives companies an incentive to shift around income so that it is attributed to the lowest-taxing jurisdictions, draining the federal Treasury of potential revenue.

News Clips

August 27, 2010 - CQ Today, "Administration Releases Report on Options for Tax Code Overhaul"
The White House released a long-awaited report on Friday that outlines options for overhauling the tax code. The 126-page document, created by an offshoot of the President’s Economic Recovery Advisory Board, does not endorse any of the listed options and does not represent official White House policy. Instead, the group, led by former Federal Reserve Chairman Paul A. Volcker, tries to set out options for upcoming debates on taxes, including a long list of suggestions that would simplify the tax system, improve compliance and revamp the corporate tax code.

May 25, 2010 - CongressDaily AM, "Reid Hints At Weekend, As 'Extenders' Opposition Mounts"
"Although our company has been a longtime supporter of the R&D tax credit that has enjoyed bipartisan support in Congress over many years, the pending legislation would impose significant new tax increases that will completely overwhelm any positive economic effect of the R&D tax credit, harming the U.S. economy just as recovery has begun," IBM vice president for governmental programs Christopher Padilla wrote to House members Monday. In fact, concern among the high-tech community was widespread, as the Information Technology Industry Council joined four broader business groups -- the U.S. Chamber of Commerce, National Association of Manufacturers, Business Roundtable and National Foreign Trade Council -- in a joint letter opposing the international tax increases.

May 24, 2010 - Dow Jones, "Obama Administration Offers Strong Support For Tax And Jobless Bill"
Business lobbying groups have denied that the tax changes address loopholes. Five of the largest business trade associations--the U.S. Chamber of Commerce, the Business Roundtable, the Information Technology Industry Council, the National Association of Manufacturers and the National Foreign Trade Council-- wrote in a Monday letter the international tax proposals "make a bad situation worse, making it even more difficult for American worldwide companies to compete."

October 13, 2009 - Wall Street Journal, "Business Fends Off Tax Hit"
... [A] coalition of business groups persuaded nearly 300 large companies, from Adobe Systems Inc. to Xerox Corp. to Yum! Brands Inc., to put their names to a letter to all members of Congress. The letter criticized the deferred-tax proposal and the administration's rhetoric about it, particularly the White House's lumping together of companies that use deferrals, which are legal, with companies accused of illegal tax practices. Deferral, and related tax credits for companies competing in markets abroad, "are integral parts of the U.S. tax system -- not 'tax loopholes,' " the letter read. "It is inaccurate and misleading to represent them as such."

October 6, 2009 - Wall Street Journal, "Is a Corporate Tax Overhaul Next?"
Prospects for action on a corporate tax overhaul next year have increased dramatically in recent weeks, according to a variety of players. House lawmakers could start holding hearings on corporate taxes almost immediately after the Obama administration’s advisory tax panel releases its options list in early December, setting the stage for a momentous debate in 2010.... [B]usinesses are worried that the government’s financial situation has gotten so bad in the last year that Congress will impose the tax increases without an offsetting rate cut, unless corporations get on board quickly.

August 27, 2009 - Birmingham Business Journal, "Study: Global Firms Account for 44% of Alabama's GDP"
A new study showed Alabama’s 626 worldwide American companies generated 44 percent of the state’s gross domestic product in 2007. And those companies employed 298,200 people directly in the state and 534,400 people indirectly through their supply chains and spending, said a study put out by Business Roundtable, an association of chief executive officers of U.S. companies that advocates for free trade and tax policies that expand opportunities for companies. These jobs were nearly 39 percent of all private-sector employment and more than 41 percent of total private-sector payroll.

June 9, 2009 - Dow Jones, "Critics Say Some Obama Tax Plans Go Beyond Closing Loopholes"
As the Obama administration seeks to boost tax income to offset vast stimulus expenditures, it has set its sights on two areas of corporate taxation, with implications that reach past the narrow confines of tax laws. Critics say the plans go beyond the administration's stated goal of closing corporate tax loopholes as a way to help cover the massive budget deficits. In one case - changes to the way multinationals are taxed - the administration is setting the country on a path that diverges from the rest of the world. In the other case - changes to inventory accounting - it's tinkering with a well-established business practice and picking on industries that use it. "These are not loopholes - they're fundamental parts of the fabric of the tax system," said Pamela Olson, a partner in the tax group at Skadden, Arps and a former assistant secretary for tax policy at the Treasury Department.

June 8, 2009 - Washington Times, "Tax-break Repeal Seen Costing Jobs"
A repeal of rules that govern the way the United States taxes the foreign earnings of American companies would make U.S. companies less competitive abroad, weaken their investments and lead to job losses at home, says a new economic report. The report, authored by Robert J. Shapiro, a former Clinton Administration economic official, and Aparna Mathur, a research fellow at the conservative American Enterprise Institute, found that as many as 2.2 million American jobs could be put at risk by a repeal or scaling-back of the so-called corporate "tax deferral" law, a provision that allows companies to delay paying taxes.

June 3, 2009 - Bloomberg, "Ballmer Says Tax Would Move Microsoft Jobs Offshore"
Obama on May 4 proposed outlawing or restricting about $190 billion in tax breaks for offshore companies over the next decade. Such business groups as the National Foreign Trade Council, the U.S. Chamber of Commerce and the Business Roundtable have denounced the proposed overhaul.

May 21, 2009 - Bloomberg, "Obama’s Tax Proposal Won’t Create U.S. Jobs, GE, Microsoft Say"
A $190 billion measure Obama proposed this month will create few, if any, jobs, according to economists, businesses and some of the president’s supporters. Ending the three offshore tax-avoidance techniques may even have a negative effect by slowing expansion to new markets that helps boost domestic output, some experts said....For their part, companies and business groups said they plan to fight Obama’s proposal by warning that it will destroy jobs. “If the Obama tax proposals are adopted, the U.S. share of the global marketplace will erode, and this will have a long- term detrimental effect on the jobs in the U.S. that support those markets,” said Cathy Schultz, vice president for tax policy at the National Foreign Trade Council, one of several Washington lobbying groups that have formed a coalition that includes companies such as GE and Microsoft to oppose Obama’s plan. The coalition cited research indicating that overseas expansion stimulates domestic growth and job creation.

May 14, 2009 - FOXBusiness.com Live, "New Tax Plan Business Fallout"
Business Roundtable President John J. Castellani and National Foreign Trade Council Vice President for Tax Policy Cathy Schultz discuss the implications of the Administration's new international tax proposals. Their remarks are featured in the second half of the segment (time stamp - 25:25).

May 12, 2009 - Politico, "Business Ready for War Over Tax Plan"
Major corporations are arming for a brawl over overseas tax breaks that could be the year’s biggest clash between business and the White House....The big companies that would be affected by Obama’s proposed changes have already closed ranks. He revealed his plan in his budget proposal in late March, and a group of about 200 trade associations and U.S.-based multinational firms immediately formed the Promote America’s Competitive Edge coalition. Members range from McDonald’s to computer maker Dell and financial services giant Prudential. In addition to the Chamber, the coalition includes heavy-hitting trade groups such as the National Association of Manufacturers and the Business Roundtable.

May 12, 2009 - Wall Street Journal, "White House Unveils Tax-Rate Details"
Business leaders have been sharply critical of the administration's proposed crackdown on offshore tax avoidance, including limits on companies' ability to defer U.S. taxes on their overseas income. The deferral system was intended to put overseas operations of U.S. companies on the same footing as their foreign counterparts. "The proposed tax increases on U.S. companies by the Treasury threaten the jobs of tens of millions of U.S. workers and our future economic growth," said John Castellani, president of the Business Roundtable. "Adopting these changes will hamstring American competitiveness."

May 11, 2009 - Tax Notes International, "Obama Presents International Tax Reform Proposals"
Ending more than two months of speculation, President Obama last week laid out his plan to raise almost $200 billion by overhauling international tax policy, but there appeared to be a lack of consensus among congressional Democrats about how or when the measures should progress....Within hours of Obama’s televised address, a new lobbying coalition of business interests was launched to counter his proposals. Calling itself Promote America’s Competitive Edge (PACE), the coalition says it represents thousands of U.S. firms that would be adversely affected by restrictions on the deferral of foreign-source income. PACE represents the combined membership of the Business Roundtable, the National Association of Manufacturers, the National Foreign Trade Council, and the U.S. Chamber of Commerce.

May 11, 2009 - Charlotte Business Journal, "Businesses Blast Tax Hike on Overseas Earnings"
Businesses were most concerned about Obama's proposed changes to tax deferral rules. Most countries tax business profits only where they are earned. U.S.-based multinationals, however, are taxed in other countries and in the U.S. The ability to defer U.S. taxes helps level the playing field, according to business groups. "When you limit deferral, you limit the ability of U.S. companies to compete, you impede growth in the U.S. economy, and you cause the loss of jobs -- both at the companies directly impacted and companies in their supply chains," said Marty Regalia, chief economist for the U.S. Chamber of Commerce.

May 11, 2009 - The Hill, "Obama Tax Plan Hits Hedge Funds, Corporations"
Businesses began to push back against Obama’s plans, saying that they would hurt U.S. firms trying to compete abroad and cost jobs during a recession. “While the administration would have the public believe that these tax increases are good for the American people, nothing could be further from the truth. The facts clearly demonstrate that expansion by U.S. business abroad leads to more and better-paying jobs in America,” said John Castellani, president of the Business Roundtable, a coalition of U.S. corporate executives.

May 6, 2009 - Financial Times, "Low-Tax Countries Hit Back at Obama's Corporate Crackdown"
The reduced attraction of the US as a base for multinationals could make them more likely takeover targets, if the acquirer were to restructure the business to remove foreign subsidiaries from the US tax net, tax experts said. Catherine Schultz of the National Foreign Trade Council, which represents multinationals, said: "If there's a reasonable business and strategic reason for the investment anyway, taxes may very well be the factor that speeds the transaction along."

May 6, 2009 - Atlanta Journal-Constitution, "Business Groups Gear Up to Fight Obama Tax Crackdown"
Under a proposal by President Barack Obama earlier this week, individuals and big U.S.-based international companies like Coke could lose their ability to defer taxes on income made from overseas subsidiaries. They also could lose their ability to move money to other countries to help avoid or defer U.S. taxes. Obama says closing the corporate tax loopholes would raise $210 billion over the next decade and would also help keep companies from moving more jobs overseas. Business groups say it will do the exact opposite, encouraging companies to move not just some operations overseas but their entire corporate headquarters.

May 5, 2009 - Tax-News.com, “Obama Announces International Tax Crackdown”
The Obama administration has unveiled its much-anticipated proposals for international tax reform….Business, however, is understandably hostile to the proposals, with the National Foreign Trade Council (NFTC) describing them as “counterproductive” during a time of economic stagnation. “The international tax provisions announced today would saddle US-based multinational companies with what amounts to a tax increase at a time when they are doing all they can to remain competitive and protect and grow US jobs,” observed NFTC Vice President for Tax Policy Cathy Schultz.

May 5, 2009 - BNA: Daily Tax Report, “Obama Unveils Far-Reaching Proposals To Crack Down on Offshore Tax Abuses
President Obama May 4 unveiled far-reaching international tax proposals that would put significant new limits on deferral under Subpart F, tighten use of the foreign tax credit, require U.S. companies to treat certain foreign affiliates and subsidiaries as corporations, and strengthen the qualified intermediary program, among other major changes…. The business community uniformly blasted the president's plan May 4, with the National Association of Manufacturers calling it a “disastrous proposal” that would seriously damage U.S. competitiveness and cost jobs. The U.S. Chamber of Commerce, the Business Roundtable, the National Foreign Trade Council, and NAM announced May 4 they have formed a coalition to fight the proposal, known as the Promote America's Competitive Edge, or PACE Coalition.

May 5, 2009 - Tax Analysts, “Obama Unveils Proposed Overhaul of International Corporate Taxation”
Ending more than two months of speculation, President Obama on May 4 finally laid out his plan to raise almost $200 billion by overhauling international tax policy, generating immediate protest from affected multinational corporations…. Within hours of Obama's televised address, a new lobbying coalition of business interests had been launched to counter his proposals. The coalition to Promote America's Competitive Edge (PACE) says it represents thousands of U.S. firms that would be adversely affected by restrictions on the deferral of foreign-source income. PACE represents the combined membership of the Business Roundtable, the National Association of Manufacturers, the National Foreign Trade Council, and the U.S. Chamber of Commerce.

May 5, 2009 - New York Times, “Obama Calls for Curbs on Offshore Tax Havens”
President Obama on Monday called for curbing offshore tax havens and corporate tax breaks to collect billions of dollars more from multinational companies and wealthy individuals. The move would appeal to growing populist anger among taxpayers but is likely to open an epic battle with some major powers in American commerce….[B]usiness groups were quick to condemn the White House for proposing tax increases amid a global downturn. “This plan will reduce the ability of U.S. companies to compete in foreign markets, which will not only reduce jobs, but will also cripple economic growth here in the United States. It couldn’t come at a worse time,” said John J. Castellani, president of the Business Roundtable, a trade association of major businesses.

May 5, 2009 - Wall Street Journal, “President's Tax Proposal Riles Business”
Business groups on Monday warned that Mr. Obama's plan would eliminate American jobs, not add them. They said the current rules are aimed primarily at putting U.S. companies on an equal tax footing with international rivals, many of which benefit from favorable tax treatment by their home countries….A coalition of business associations and corporations, known as PACE, or Promote America's Competitive Edge, also criticized the Obama plan. It announced the establishment of a Web site, www.pace4jobs.org, as a source for information on corporate tax issues.

May 5, 2009 - Dow Jones, "Obama Tax Proposal Would Reverse Clinton-Era Loophole"
The Treasury Dept., under the administration of President Bill Clinton, created the rules in 1997 in an attempt to make it easier for firms to signal to the IRS their status for tax purposes. Firms could now "check the box" to designate whether they want to be treated as a corporation or a partnership, instead of a more complex set of tests for determining entity type...Business groups say the rules give firms more flexibility in moving capital around within the same group, and that flexibility translates into being better able to hold their own against foreign competitors. The Obama proposals "would just pile on an additional tax, jeopardizing U.S.-based multinational companies' ability to compete both here and overseas," said Cathy Schultz, vice-president for tax policy at the National Foreign Trade Council.

May 5, 2009 - Financial Times, “US Companies Cry Foul Over Fix For a 'Broken System'”
In his quest for a $210bn tax boost, Barack Obama, US president, will look as far afield as the Cayman Islands and Amsterdam, but the toughest fight is back in Washington with the serried ranks of corporate and conservative America. Anticipating reform, which was mooted by Mr Obama during his campaign for the White House, US multinational companies from Caterpillar to Pfizer are already engaged in fervent lobbying efforts to prevent more profits made in lower-cost jurisdictions being taxed at home. "It is the wrong idea, at the wrong time for the wrong reasons," said John Castellani, president of the Business Roundtable. "It will cripple economic growth, reduce the competitiveness of US companies overseas and destroy jobs."

May 5, 2009 - Washington Post, "Obama Targets Overseas Tax Dodge"
[M]ore than 200 U.S. companies and trade groups have signed a letter asking congressional leaders to oppose Obama's proposal to limit their ability to defer U.S. tax payments. The letter, signed by Alcoa, General Electric, McDonald's and Microsoft, among others, warned that restricting the deferral rules would make it difficult to compete abroad. The U.S. Chamber of Commerce also denounced Obama's plan. And John Castellani, president of the Business Roundtable, a coalition of the nation's largest firms, called it "the wrong proposal at the wrong time for the wrong reasons" that will "make us less competitive in the international marketplace, where, by last count, 95 percent of the world lives."

May 5, 2009 - Washington Times, "Businesses Pan Tax Crackdown"
President Obama proposed detailed plans Monday to crack down on corporate tax loopholes, prompting a strong reaction from business groups, arguing that the president's proposal went too far and would be too punitive on U.S. corporations..."We're not pleased with this proposal, but there are a lot of other issues. We're working closely with the administration on health care reform, regulation reform and getting the economy going again," said John J. Castellani, president of Business Roundtable. "It's just unfortunate that this is the wrong idea at the wrong time for the wrong reasons.

May 5, 2009 - Philadelphia Inquirer, "Effect of Obama Business-tax Proposals Debated"
New business-tax proposals introduced yesterday by President Obama could close loopholes and add $210 billion in new revenue to the federal kitty over 10 years...Some business leaders immediately attacked the proposal. "This plan will reduce the ability of U.S. companies to compete in foreign markets, which will not only reduce jobs, but will also cripple economic growth here in the United States. It couldn't come at a worse time," said John J. Castellani, president of the Business Roundtable, an association of chief executive officers of large companies.

May 5, 2009 - Pittsburgh Tribune-Review, "Obama Targets Corporate Loopholes"
President Obama detailed a plan Monday to recover billions in revenues by closing overseas tax loopholes used by corporations, drawing both praise and scorn..."The administration's proposal to repeal or fundamentally change the deferral, which has been part of our tax laws for decades, would not affect our foreign competitors," he said. "Instead, it would impose a unilateral tax on the foreign earnings of American companies."

May 5, 2009 - CNSNews.com, "Obama Seeks to Close Overseas Tax Loopholes Despite Business Group's Objections"
While President Barack Obama says tackling overseas tax havens will “level the playing field,” a prominent business group contends the president’s proposal to close loopholes and hire 800 additional IRS agents is “wrong.”...About 95 percent of consumers live outside the United States, and this legislation would make international growth more difficult, said Castellani. “When U.S. companies expand abroad, America’s exports go up and America’s workers gain access to more and better-paying jobs at home,” Castellani said. “This proposal would reduce companies’ ability to compete abroad, cutting off these benefits to U.S. workers.”

May 5, 2009 - Wilmington News Journal, "Obama Targets Low-tax Havens"
President Barack Obama took aim Monday at the overseas profits of U.S. companies, unveiling tax proposals the administration said would close “loopholes” and generate about $210 billion in tax revenue over the next decade....The proposal would effectively be the biggest tax increase on U.S. corporations since 1986 when combined with a $60.1 billion plan to limit many deductions American companies take advantage of to defer tax on foreign profits, and a $43 billion crackdown on abusive foreign tax credits.

May 4, 2009 - CongressDailyPM, “Obama Pushes To Close Loophole For Offshore Havens As Business Groups Blast Tax Plan For Economic Impact”
President Obama's plan to impose $189.6 billion in tax increases on U.S. multinationals' overseas operations met with howls of protest from the business community, and a top Democratic tax-writer urged caution. Senate Finance Chairman Max Baucus said "further study is needed to assess the impact of this plan on U.S. businesses" but that the proposals "set the table for tax reform" next year. National Association of Manufacturers President John Engler called the proposals "disastrous," as business groups, including the U.S. Chamber of Commerce and Business Roundtable, promptly reacted with alarm. Industry officials applauded the inclusion of a permanent research and development tax credit, at a cost of $74.5 billion, but said the trade-off was not nearly worth the $190 billion in tax increases they face.

May 4, 2009 - CQ Today, “Obama Announces Plan to Curtail Overseas Tax Deferrals”
President Obama announced Monday a series of significant changes to the international tax system, starting a major fight with U.S. businesses. The proposals put some detail on a frequent applause line that Obama uses, in which he pledges to “end tax breaks that ship our jobs overseas.” Until now, that was as detailed as the president had gotten, save for a $210 billion revenue-raising line item in his budget outline…“The international tax provisions being proposed by the administration will make the U.S. more of an outlier on international taxes than it currently is,” said Catherine Schultz, vice president for tax policy at the National Foreign Trade Council. “The U.S. has the second highest tax rate in the world, and these provisions will significantly increase the tax costs on global companies with U.S. headquarters.”

May 4, 2009 - Wall Street Journal, "Firms Face New Tax Curbs"
The Obama administration will roll out details Monday of what aides are calling a far-reaching crackdown on offshore tax avoidance, targeting many U.S.-based multinational corporations and wealthy individuals. President Barack Obama will flesh out a proposal included in his February budget blueprint seeking to curb the practice of parking foreign earnings in offshore tax havens indefinitely. By some estimates, $700 billion or more in U.S. corporate earnings have accumulated in overseas accounts in recent years…."If rules are changed on tax deferral and we are taxed in the U.S. on non-U.S. profit, this significant additional U.S. tax cost would adversely impact our ability to invest and grow our business in the U.S....and to compete against our foreign competitors who are not subject to this U.S. tax," said John Earnhardt, a Cisco Systems Inc. spokesman.

May 4, 2009 - New York Times: The Caucus Blog, "Obama Takes Aim at Offshore Tax Havens"
The president is aiming to take away the competitive advantage for companies that invest and create jobs overseas, working to replace their tax advantages with incentives to produce jobs in the U.S. Several large businesses have opposed the proposal, telling Congressional leaders in March that the provisions would make U.S. companies less competitive. About 200 companies and trade associations, including Microsoft Corp., General Electric Co. and the U.S. Chamber of Commerce, signed a letter stating that the proposed changes to the tax code would put them at a disadvantage with their rivals.

May 4, 2009 - San Jose Mercury News, "Obama's Push to Levy Taxes on Overseas Profits Alarms Tech Giants"
In the tech industry's first major disagreement with the Obama administration, Silicon Valley companies are voicing alarm about a proposal that could require corporations to pay billions of dollars in U.S. taxes on foreign earnings. The administration wants to change a long-standing law that allows American companies to defer paying these taxes as long as the funds are kept overseas. That could have a big impact on a number of U.S. corporations, especially tech giants such as Hewlett-Packard, Cisco Systems and Oracle, which report that overseas markets account for half or more of their sales.

May 4, 2009 - CongressDaily AM, "Outlook: Taxes"
This week is also expected to mark the long-awaited release of the Treasury Department's detailed tax proposals, filling in some of the blanks from President Obama's initial truncated budget submission in February….Obama has included the undefined proposal as a revenue-raiser to help curb deficits and pay for other priorities. But a broad coalition of multinational companies such as IBM, Coca-Cola and Caterpillar have banded together to fight efforts to eliminate their ability to shield overseas profits from U.S. taxes, arguing the money is taxed by their host countries. Foreign competitors do not face similar double-taxation, multinationals argue, so curbing "deferral" would put U.S. firms at a disadvantage.

May 4, 2009 - Forbes, “Business In The Beltway: Obama's Pitch Taxes Credulity”
On Monday the White House announced plans to raise $210 billion over 10 years by "curbing tax havens and removing tax incentives for shifting jobs overseas." But the plan may be a lot more about raising $210 billion than about preventing job loss or stopping much tax fraud, say tax experts who have evaluated the proposal.… It would raise tax revenue, and that means businesses--which would be footing the bill--were quick to cry foul. The U.S. Chamber of Commerce, National Association of Manufacturers and National Foreign Trade Council were quick to condemn the plan. Cathy Schultz, the vice president for tax policy of the NFTC, said the proposal "would saddle U.S.-based multinational companies with what amounts to a tax increase at a time when they are doing all they can to remain competitive and protect and grow U.S. jobs."

May 4, 2009 - Associated Press, "Congress Leery About Obama's Plan on Tax Loopholes"
President Barack Obama promised sternly on Monday to crack down on companies "that ship jobs overseas" and duck U.S. taxes with offshore havens. It won't be easy. Democrats have been fighting — and losing — this battle since John F. Kennedy made a similar proposal in 1961. Obama's proposal to close tax loopholes was a reliable applause line during the presidential campaign, but it got a lukewarm response Monday from Capitol Hill....A coalition of business groups has already stepped up lobbying efforts to kill attempts to increase taxes on overseas profits, saying it would make American companies less competitive. "We're talking about American jobs at American companies and their ability to compete overseas," said John J. Castellani, president of the Business Roundtable.

May 4, 2009 - Bloomberg, "Obama Plan on Tax Havens Faces Hurdle in Congress"
President Barack Obama’s plan to end tax breaks for U.S.-based multinational companies drew a skeptical response from fellow Democrats on Capitol Hill, indicating that his proposal may face obstacles in Congress...Obama’s plan drew immediate criticism from the U.S. Chamber of Commerce and the Business Roundtable, a group of chief executives at some of the biggest U.S. companies. Roundtable President John Castellani said Obama is pushing “the wrong idea at the wrong time for the wrong reasons.”

May 4, 2009 - Bloomberg, "Obama Seeks End of Corporate Tax Break to Raise $190 Billion"
The proposal stopped short of an outright repeal of U.S. tax-deferral rules, as feared by a coalition of 200 companies and trade groups ranging from Alcoa Inc. to Yum! Brands, Inc. that was spearheaded by the Business Roundtable, U.S. Chamber of Commerce and National Foreign Trade Council, all Washington- based trade associations...In letters to congressional officials including House Speaker Nancy Pelosi, a California Democrat, and Senate Majority Leader Harry Reid, a Nevada Democrat, the trade groups warned such a repeal would hurt U.S. companies’ competition with their foreign rivals by increasing operating costs. That would make U.S. companies vulnerable to takeover and cost American jobs, they said.

May 4, 2009 - Reuters, "Business Groups Critical of Obama's Tax Proposals"
Business groups said President Barack Obama's proposals to tighten tax rules on overseas activities will make companies less competitive, but U.S. officials called the changes announced Monday long-overdue fixes to curb abuses..."President Obama's plan today to increase taxes on American corporations is the wrong idea at the wrong time for the wrong reasons," John Castellani, president of the Business Roundtable, said in a statement.

May 4, 2009 - Dow Jones, "Geithner: Changes Will 'Restore Balance' To Tax Code"
The White House on Monday unveiled proposals to cut tax benefits for U.S. corporations that invest overseas and to use some of the expected revenue to make permanent a tax credit for investment in research and development... Business groups including the U.S. Chamber of Commerce, National Association of Manufacturers and Business Roundtable vowed to fight the proposals. "At a time when our economy is struggling and thousands of jobs are being lost every month, imposing an additional tax on U.S.-based international companies would put them at a massive disadvantage and cost American jobs," said National Association of Manufacturers President John Engler.

May 4, 2009 - CQ Politics, "Battle Begins as Tax Plans Issued"
Business groups, prepared for the attack, pointed to the need to serve overseas markets. They also cited the research and headquarters jobs that those foreign operations support here. “It’s an integrated system that we have,” said Dorothy Coleman, vice president of tax and domestic economic policy at the National Association of Manufacturers. “U.S. jobs support jobs overseas, and to the extent that you impose a significant amount of new taxes on multinationals, they’re not going to be able to hire as many people.”

May 4, 2009 - BusinessWeek, "Changing Corporate Tax Rules: A Tough Road Ahead"
Arguing that a "level playing field" is needed, the Obama plan aims to change tax deferral rules for companies that invest overseas and make some other regulatory changes that would cut down on the use of overseas tax havens for businesses and individuals...The business community is already putting up a tough fight. Business Roundtable, an association of CEOs of the largest U.S. corporations, the U.S. Chamber of Commerce, and other business groups have launched a vigorous lobbying effort against the plan, arguing that the $210 billion hit to American businesses would distort the playing field and leave U.S. companies at a disadvantage in the corporate arena compared with other countries' tax regimes.

May 4, 2009 - Christian Science Monitor, "Obama Targets Tax Havens, and Corporate America Shudders"
President Obama vowed Monday to curtail the tax benefits of US companies and individuals who stash cash in overseas accounts...“President Obama’s proposals should only be considered in the context of broader tax reform that is designed to increase the competitiveness of US companies,” said John Castellani, president of the Business Roundtable, a Washington association of big US firms...Business groups are already lining up against the Obama proposal. The changes could hit hard some of the largest and most politically powerful companies in the nation, such as Coca-Cola and General Electric.

April 29, 2009 - BusinessWeek, “Obama’s First Business Report Card”
By far the biggest change on the corporate tax front was his proposal to raise $210 billion in new revenues by going after foreign tax breaks, including limiting the ability of U.S.-based multinationals to defer paying taxes on the income they earn overseas until they repatriate it…The move has unleashed a wave of opposition among U.S. multinationals and large trade associations. In recent weeks, the U.S. Chamber of Commerce, the Business Roundtable, and others have formed a broad-based lobbying coalition, called Pace4jobs, to argue that the move will cost the U.S. more jobs than it gains. They argue that the plan will leave U.S.-based companies vulnerable overseas because foreign rivals won't have to pay the 35% U.S. corporate tax rate—instead paying the tax rates in effect overseas, which in general are considerably lower. As a result, they say, U.S. subsidiaries will become less competitive, costing them market share and profits.

April 22, 2009 - Wall Street Journal, “Titans Vow Overseas-Tax Fight”
Under current law, U.S. companies can defer taxes indefinitely on the profits they say they have earned overseas until they "repatriate" that money back to the U.S. The administration has proposed changing this law, and has already baked in the new tax receipts into its budget figures for 2011…The likelihood of some change to the current law is generating intense opposition from companies that generate big earnings offshore. Two hundred companies organized by the Business Roundtable wrote to congressional leaders last month to oppose the proposal. "It's probably the top issue right now for the tech community," said Ralph Hellmann, the lead lobbyist for the Information Technology Industry Council. "This one hits the bottom line of companies more than any other issue right now. We have to defeat it."

April 16, 2009 - Cincinnati Enquirer, "Tax Plan Would Costs Jobs, P&G Says"
A tax proposal in President Barack Obama's budget would cost Procter & Gamble more than $1 billion a year and put Cincinnati jobs at risk, company officials said Thursday. P&G and other U.S. corporations that do business in other countries can now defer paying taxes on the money they earn there. The Obama administration is considering ending or limiting that practice, a move that could raise up to $210 billion in tax revenue, according to estimates. But P&G's top financial officer said the proposal could bring the exact opposite: It could shrink business and cause a loss of jobs – and a loss of tax revenue.

April 11, 2009 - Congressional Quarterly, “Tax Code Changes: Industry in the Cross Hairs”
U.S. corporations contend that their ability to at least defer tax on income earned abroad is vital if they are to remain competitive against companies based in the vast majority of countries that use so-called territorial tax systems, in which levies are assessed only on income earned within their borders…. Hoping to counter the critics, U.S. corporations have seized on arguments such as those made by Mihir Desai, a professor at Harvard Business School who has written extensively on corporate taxation and international investment. Desai disputes the oft-heard claim that U.S. corporate investment overseas comes at the expense of operations at home. Rather, international investment usually complements domestic investment, he says

April 11, 2009 - National Journal, “Business Bracing for Tax Battle”
The business community is bracing for a major fight over President Obama's pledge to end tax breaks "for corporations that ship our jobs overseas" as he seeks revenues to pay for his ambitious -- and expensive -- domestic policy agenda. …Industry officials have put preserving "deferral" at the top of their priorities list, ahead of better-known battles over trade deals, climate change, and initiatives that make it easier for workers to unionize. "Everything else pales in comparison, "says National Foreign Trade Council President William Reinsch, whose group is partnering with the Business Roundtable, the U.S. Chamber of Commerce, and the National Association of Manufacturers to preserve the deferral rule.

April 6, 2009 - Wall Street Journal, "Firms Move to Fight Overseas-Profit Tax"
In one of the biggest battles between the business community and the White House, corporate lobbyists are intensifying efforts to block an Obama administration proposal to raise taxes on overseas profits. Executives say the measure, which could cost U.S.-based multinationals $100 billion over the next decade, would hamper economic recovery efforts. In recent days, groups including the Business Roundtable, the U.S. Chamber of Commerce, the National Association of Manufacturers and the National Foreign Trade Council have helped form a lobbying coalition called Protect America's Competitive Edge that is devoted specifically to the issue.

April 6, 2009 - BNA, “Concern Building in Business Community About Potential Cuts to Deferral, NFTC Says”
The business community is deeply concerned that proposals to significantly cut back or eliminate deferral under Subpart F are likely to be made by the Obama administration in coming weeks and could have political legs, senior officials with the National Foreign Trade Council said April 3. Although no details have been made available about how the administration plans to reach billions in savings associated with international taxes, a line item included in the president's budget in February, “we have to go with the assumption that they're going to go with a repeal of deferral or significantly cutting it back,” Catherine Schultz, NFTC vice president for tax, told reporters at an April 3 briefing.

April 1, 2009 - Pittsburgh Tribune-Review, “Deferred Tax Proposal Infuriates Local Companies”
Western Pennsylvania corporations that operate overseas were among 200 warning congressional leaders that a proposal to limit or end deferred payment of taxes on foreign profits would harm American workers and the economy. Alcoa Inc., Bayer Corp., PPG Industries Inc., U.S. Steel Corp. and Wesco Inc. were among companies and trade groups who wrote a letter expressing "strong" displeasure with President Obama's effort to eliminate deferred taxes on foreign profits.

March 25, 2009 - Inside U.S. Trade, “Multinationals, Associations Oppose Obama Tax Deferral Reform”
A coalition of multinational corporations and business groups this week launched a campaign against the Obama administration's plans to potentially limit or repeal rules which allow those companies to defer U.S. taxes on offshore profits until they repatriate them to the United States. Limiting or repealing these deferrals would leave U.S. corporations less competitive and give foreign companies based in countries that employ a territorial system of taxation an unfair advantage, they said in a March 24 letter to House and Senate leaders.

March 25, 2009 - Dow Jones, “White House Reaches Out To CEOs On Foreign-Pft Tax Plan”
Top economic aides in the Obama administration are reaching out to corporate chief executives on an issue that cuts very close to their bottom lines - a promise by President Barack Obama to raise taxes on companies' overseas income…. At issue is the firms' ability to defer paying taxes indefinitely on active business income earned abroad, a cherished perk known as "deferral." Under current law, U.S. taxes aren't due on that income as long as it is reinvested in foreign operations. If it is returned to the U.S., it is subject to the U.S. corporate income tax of 35%.

March 25, 2009 - Congress Daily AM, “Biz Groups Pressure Dems To Let Up On Efforts To End Overseas Incentives”
About 200 companies and trade associations wrote to congressional leaders Tuesday urging them to oppose a move to end the current tax regime where companies are able to indefinitely defer tax on foreign earnings until the money is brought back to the United States…. Many business sectors are represented by the letter, from retail and oil and gas to pharmaceuticals and financial services. Major lobbying associations -- including the Business Roundtable, National Foreign Trade Council, U.S. Chamber of Commerce, and National Association of Manufacturers -- that are coordinating the campaign were signatories, as well as lesser-known groups like the Adhesive and Sealant Council and Carpet and Rug Institute.

March 16, 2009 - Congress Daily PM, “Study Stresses Multinationals' Domestic Investment”
A coalition of U.S. multinational corporations today released a report claiming that the global firms are focused on investing at home and employing American workers, contrary to the notion they would prefer to "ship jobs overseas."… The report was released as the business community prepares to do battle with the Obama administration and congressional Democrats over proposals to eliminate or sharply curtail "deferral" of tax on overseas income, which has been a staple of the U.S. tax code for decades. Under deferral, U.S. companies are not taxed on income earned and reinvested overseas until it is brought home, which firms argue is necessary to keep them competitive with foreign-based firms in overseas markets. Some of the biggest U.S. multinationals are aggressively competing abroad, and have billions of dollars in profits overseas to prove it.

March 13, 2009 - Wall Street Journal, "WSJ: US Firms Gird For Battle On Obama Foreign Profits Tax”
U.S. global firms are mobilizing to fight a White House proposal to roll back tax benefits on their overseas profits, even as President Obama Thursday softened his rhetoric on the issue. Firms are so intent on preserving their tax benefits on overseas income that IBM (IBM) CEO Samuel Palmisano made it the lead-off question following Obama's remarks Thursday to members of the Business Roundtable. Palmisano noted that current tax rules on the overseas profits of U.S. firms "help American competitiveness, "and called for a dialogue with the White House on the issue.

March 5, 2009 - BusinessWeek, “A Backlash Against Obama's Budget”
Multinationals are homing in on Obama's plans to limit their ability to defer U.S. taxes on income earned abroad. Today, American companies with operations abroad can defer paying the U.S. corporate tax rate of 35% until they bring their profits home; instead, they pay the local tax rate, which is generally lower. But Obama's team argues that such laws encourage U.S. companies to move jobs overseas...For much of the past year, the Roundtable has been alerting congressional staffers to the problems they believe eliminating tax deferral would cause. Now, along with the Chamber of Commerce, the National Foreign Trade Council, and NAM, they are going into overdrive. The strategy: Make the case with studies showing how competitiveness would be damaged, then bring in CEOs to drive the point home to their congressional representatives.

March 1, 2009 - Houston Chronicle, “Critics Question President's Pursuit of Overseas Tax Breaks; Some Wonder if Obama's Plan Will Affect Jobs”
President Barack Obama's pledge to end tax breaks for multinational corporations "that ship our jobs overseas" is welcome news for organized labor, but tax experts question whether it will help U.S. workers…Business views changes on taxation of foreign earnings as hurting American competitiveness overseas. "Companies don't sit here and talk about how the tax system makes it more advantageous to move jobs overseas, "said John Castellani, president of the Business Roundtable, an organization of U.S. corporations. "It doesn't work that way."… Instead of saving American jobs, drastic changes in the tax laws might lead some corporations to lift anchor from U.S. shores altogether, said Gary Hufbauer, a former Treasury Department official who is now a senior fellow at the Peterson Institute of International Economics.

February 5, 2009 - Congress Daily PM, “Dorgan Expected To Offer Amendment On Overseas Profits”
As the Senate works its way through what could be the homestretch of the amendment process of the stimulus bill, the business community is trying to kill an effort by Sen. Byron Dorgan, D-N.D., and other Democrats to slap a tax increase on corporations doing business abroad….The National Association of Manufacturers, among other business groups, is opposed, arguing it would sharply hinder the operations of U.S.-based businesses with overseas subsidiaries. Dorothy Coleman, NAM's vice president of tax and domestic economic policy, wrote to senators today urging them to oppose the amendment, arguing it would be a job-killer.