Ahead of the House Ways and Means Committee hearing on “Expanding on the Success of the 2017 Tax Relief to Help Hardworking Americans,” Business Roundtable sent a letter to Chairman Smith and Ranking Member Neal highlighting the importance of a competitive tax system for economic growth and job creation in the United States.
In the letter, Business Roundtable states that reforms in the 2017 Tax Cuts and Jobs Act (TCJA) resulted in historic wage and job growth and investment in the United States:
“Prior to passage of TCJA, a survey of Business Roundtable members indicated that 76% of CEOs would increase hiring at their company if tax reform was enacted. Indeed, after passage and prior to the pandemic, the 3.5% unemployment rate was the lowest rate since 1969 and nearly 3 percentage points below the average for the 15 years from 2003 through 2017.
“... Business responded to the pro-growth changes in TCJA and brought money back home. Overall, firms have repatriated nearly $2.5 trillion in past overseas earnings since passage of TCJA. By neutralizing the favorable tax treatment of foreign operations, Congress created an incentive for American corporations to repatriate foreign earnings.
“... Further, base broadening and pro-growth tax reform have resulted in record high corporate tax receipts that exceeded pre-TCJA Congressional Budget Office (CBO) estimates by tens of billions. In dollar terms, FY2023 corporate tax revenue was 6% higher than CBO’s pre-tax reform FY2023 forecast. CBO forecasts record breaking corporate receipts again this year.
“... As a result of the base broadening and international changes in TCJA and additional tax increases in subsequent years, even what may seem like small increases in the corporate tax rate would result in most corporate earnings being taxed at a higher effective tax rate than prior to 2018, when the United States had the highest corporate tax rate among developed countries.
“There is widespread agreement, including from CBO, the Joint Committee on Taxation and the OECD that a significant portion of the corporate tax burden is borne by workers in the form of lower wages. The Treasury Department estimates that families making less than $72,500 pay more in corporate income taxes than they do in individual income taxes. Failure to maintain a competitive tax code will hurt hardworking Americans.”
For the full letter, click here.