The following letter was sent to Sens. Ron Wyden (D-OR) and Orrin Hatch (R-UT) of the Senate Finance Committee, and Reps. Dave Camp (R-MI) and Sandy Levin (D-MI) of the House Ways and Means Committee.

Recent discussions of funding mechanisms to resolve a shortfall in the highway trust fund include proposed changes to the corporate tax code that would raise taxes on businesses.

Business Roundtable strongly opposes the use of business tax increases for unrelated spending that will divert revenue needed for comprehensive tax reform legislation.  In the context of matters pending before the current Congress, we are particularly opposed to ad hoc business tax increases to fund highway improvements, even if paired with a temporary reduction in the tax rate on repatriations.  The reasons for our opposition are outlined below, and highlight the negative and unintended consequences that can flow from revenue-driven tax changes on business.

The U.S. corporate tax system is in desperate need of comprehensive and permanent reform.  There is bipartisan support from Congress, as well as the Administration, to improve the ability of American companies to compete, grow, and increase employment. The U.S. corporate tax rate is the highest in the developed world and the U.S. is one of the few developed countries to tax foreign earnings when repatriated to the United States. Permanent tax reform is needed to address the long-run competitiveness issues facing American companies and our ability to compete in the global economy.

Based on revenue estimates by the Joint Committee on Taxation, a repatriation holiday comparable to the prior 2004 provision would reduce government tax collections over the 10-year budget period unless combined with other tax changes that explicitly increase taxes, such as a rumored proposal to permanently limit interest deductions of American companies with global operations. Any such limitation on interest deductions would raise the cost of financing new investment for American companies, and thereby disadvantage American companies relative to their foreign-based competitors. Further, any business tax increase outside of tax reform would reduce the ability to achieve revenue-neutral and permanent comprehensive tax reform to improve the competitiveness of the U.S. economy.