A top lobbying group for major chief executives is set to begin a campaign calling on Congress to achieve corporate tax reform that lowers tax rates, shields offshore profits from taxation, and does not raise any new revenue.
Business Roundtable, a collection of CEOs from top business groups, will spend at least hundreds of thousands of dollars pushing to lower the corporate tax rate to 25 percent, while also pushing for the adoption of a “modified-territorial” tax system that exempts most offshore profits from taxation and makes it easier to move even more profits to tax havens, The Hill reports:
The CEO group — which says it will spend well into six figures on the campaign, using both print advertisements and digital outreach — calls for reducing the top corporate tax rate from 35 percent to 25 percent, a marker that’s also been laid down by Rep. Dave Camp (R-Mich.), the chairman of the House Ways and Means Committee.
Roundtable officials are also pressing for a revenue-neutral corporate reform, meaning the rewritten code wouldn’t bring in more or less revenue than it did before, and the adoption of a modified territorial system, which would shield offshore corporate income from taxation.
A territorial tax system has for years been a top priority of multinational corporations based in the United States, and it has been adopted by top Republicans (including 2012 presidential candidate Mitt Romney) too. Such a tax system, however, would “increas[e] incentives to shift business operations and reported income to countries with lower tax rates,” according to the Congressional Budget Office, and that’s an incentive American corporations don’t need. The largest companies already have nearly $1.5 trillion sitting offshore, according to recent reports.
And while the lobbying group insists that the package of tax cuts and other reforms should be revenue neutral, the effective corporate tax rate plunged to a 40-year low in 2011 even though corporate profits have hit a 60-year high. Corporations haven’t paid the full tax rate in 45 years, and 26 major companies paid absolutely nothing in taxes over the last four years. Meanwhile, closing corporate tax loopholes that incentivize moving jobs and investment overseas could raise an additional $168 billion in revenue over the next decade.