A round-up of news coverage of BRT and other business groups responding to President Obama's speech in Chattanooga, Tenn., Tuesday on jobs and tax reform. Here's BRT's full statement, which also touched on trade and infrastructure.
Associated Press, "Obama challenges GOP to accept corporate tax deal":
John Engler, president of the Business Roundtable, welcomed Obama's call for lowering the corporate tax rate. But like many Republican lawmakers, he called for addressing individual tax rates at the same time and said he opposed using corporate tax overhaul revenue for "unrelated spending." "Corporate tax reform should be part of a comprehensive fix for the individual and business tax codes, and corporate reform should be achieved in a revenue-neutral manner," said Engler, who heads the association of business leaders.
U.S. News & World Report "Business Community Not Sold on Obama Tax Plan":
Speaking at an Amazon fulfillment center in Chattanooga, Tenn., President Obama announced that his plan would lower the federal corporate tax rate from 35 percent to 28 percent for most corporations and to 25 percent for manufacturers. He also announced the plan would be revenue neutral, making up for the lower rate by closing loopholes. Obama also proposed a "minimum tax on foreign earnings," according to information released by the White house, aimed at discouraging companies from holding their money overseas.
Some business leaders offered praise for the proposal to lower corporate tax rates. "We're very encouraged. We really appreciate the fact that the president is highlighting the high rate," says Elaine Kamarck, co-chair of the RATE Coalition, a group of big businesses who advocate for tax reform.
Likewise, Business Roundtable, a Washington-based association of U.S. CEOs, applauded the president's move to lower the top corporate tax rate. But aside from the rate reductions, business advocacy groups had plenty of complaints.
"The president used all the right buzz words but said nothing of substance," says Martin Regalia, chief economist at the U.S. Chamber of Commerce, in an emailed statement. He blasted the president's plan as incomplete, since it doesn't also reform the individual income tax code, whose rates some small businesses pay instead of the corporate rates.
The Business Roundtable agreed. While the group says it welcomes lower rates, it also believes the president's plan doesn't go far enough. "[Corporate] tax reform should be part of a comprehensive fix for the individual and business tax codes," the group's president, John Engler, said in a statement.
Organizations representing small businesses, including the National Federation of Independent Business, warned that an approach that reduces corporate tax rates to below 30 percent without affecting individual rates that top out near 40 percent would hurt millions of businesses that pay their taxes through their owners’ individual returns. "Corporate tax reform should be part of a comprehensive fix for the individual and business tax codes, and corporate reform should be achieved in a revenue-neutral manner,” said John Engler, president of the Business Roundtable, an association of chief executives of large companies. “Moreover, all revenues from corporate base-broadening measures should be applied to corporate rate reduction and to modernizing our international tax system, not for unrelated spending,” Engler, a former Republican governor of Michigan, said.
Financial Times, "Obama offers tax ‘grand bargain’":
Barack Obama on Tuesday withdrew a demand that corporate tax reform be coupled with higher taxes on the wealthy in a bid to convince Republicans to support a fresh stimulus for the economy. The White House said it had devised a new “grand bargain” that would establish a top tax rate of 28 per cent for companies and close tax loopholes, saying the president would agree to these terms in the absence of a larger deficit reduction deal that has eluded Mr Obama for years.... The Business Roundtable, another lobby group, said any revenue gained from tax reform ought to be applied to further rate reduction, “not for unrelated spending”.
And Douglas Holtz-Eakin of the Alliance for Competitive Taxation argues the following in a Politico op-ed, "Tax Reform would fuel U.S. economy."
It’s clear the current system of international taxation discourages economic growth and hurts American businesses. But over the past few decades, as other countries have modernized their international taxation rules to keep homegrown businesses from relocating abroad and to help attract new companies, the United States has stuck to its antiquated ways. This stubbornness is not without cost: The U.S. gross domestic product has shrunk by 1.2 percent to 2.0 percent as a result, and foreign acquisitions of American companies have outstripped American acquisitions of foreign companies by more than $500 billion since 1990. And while the United States unfairly disadvantages its workers and firms, other countries are eager to compete.
After Japan adopted its territorial tax system in 2009, the country enjoyed a 31 percent increase in cross-border acquisitions. The United Kingdom declared its intention to modernize its corporate tax code by saying it would “send out the signal loud and clear that Britain is open for business.” The Canadian government was even more explicit, writing that its mission “is to create a meaningful tax advantage over the United States.” And Germany, in pursuit of a simpler tax code, has cut its corporate income tax rate more than 20 percentage points since 1998. Success, then, is a choice. The evidence is in: The status quo isn’t working. To better compete, it is time to learn from what is working for other countries. There is no single blueprint for the territorial system to adopt; each country has adapted its tax code to find what works best for it. The United States should follow suit. What are we waiting for?