Policy - Tax Policy
In the 1960s, 18 of the world’s largest companies built their headquarters in America. Today, only six of the world’s 20 largest non-financial companies have chosen to be headquartered in the U.S. This alarming trend serves to highlight the problems of an antiquated U.S. corporate tax system that is driving capital investment out of America and into the hands of our foreign competitors.
We live in a worldwide marketplace; it’s time America had a world-class tax system that helps to spark new jobs and new industries across the country.
ITI advocates for tax reform that levels the international playing field. We consistently have urged the federal government to enact a tax system that makes America more competitive and a magnet for job creation and business investment. In working with Congress, ITI seeks to lower the corporate rate in a fiscally responsible manner, move to a territorial system that keeps job creators from being taxed twice on their earnings, and make permanent incentives for breakthrough research and development. These pillars will help to spark job creation and innovation throughout the U.S. economy.
The U.S. is the only large economy with both a worldwide tax system and a high corporate tax rate – in fact, the highest corporate rate in the world. Lowering the rate to 22 percent would bring the U.S. in line with foreign competitors. It also would be a major boost for small businesses across the country. Right now, American companies operating globally directly sustain more than 22 million U.S. jobs and 41 million jobs indirectly. They buy $3 billion in goods and services from small businesses here at home, with a cumulative impact of more than $1.52 trillion. Lowering the tax rate would only strengthen the partnerships between large and small businesses, putting more people to work and generating new opportunities for the country.
Shifting from a global to a territorial tax system will relieve American companies from double taxation and harmonize our tax system with the majority of the developed world. Currently, earnings by a U.S. company abroad can be taxed twice: first, by the foreign country where the sales took place; and, second, by the U.S. government when the earnings come home. This double taxation creates a disincentive for U.S. companies to bring those earnings home and invest them here. A territorial system prevents double taxation, gives the economy a much-needed boost, and puts U.S. companies on the same competitive level as many of their foreign competitors.
Finally, research-and-development innovations lead to new patents, products, and jobs. Since it was created in 1981, the R&D tax credit has a proven track record of stimulating U.S. investments, wage growth, consumption, and exports. Yet, the U.S. has allowed innovation incentives to lapse completely. It’s time to encourage breakthrough technologies to create new industries and jobs.
To secure our economic future and innovative leadership in the global marketplace, the U.S. must introduce tax policies that allow American companies to compete globally. Without such policies, America will no longer be an attractive place to start and grow a business. For these reasons, ITI urges Congress to support investment in U.S. technology and innovation by passing legislation that will improve the competitiveness of the U.S. high-tech sector, as well as U.S. businesses generally.
- ITI OECD Pillar 2 Comments (December 02, 2019)
- ITI Cloud and Digital Content Transactions IRS Comments (November 13, 2019)
- ITI OECD Pillar 1 Submission (November 11, 2019)
- ITI Testimony USTR 2019-0009 French Digital Services Tax (August 12, 2019)
- ITI Supplemental Letter R&E Expense Allocation (April 22, 2019)
Ensuring the U.S. Tax System Incentivizes U.S. Jobs and Innovation (May 17, 2019)
As lawmakers have considered changes to the tax code over the years, a few common principles have underpinned those efforts. First, they have wanted to create incentives to locate jobs in the United States. ...
Looking Ahead in the Global Digital Services Tax Debate (April 12, 2019)
This week action occurred in France that received little notice. On Monday, the Assemblée Nationale passed digital services tax legislation that would apply a three percent tax on revenues derived from ...
Tech’s Legislative Outlook for 2019: Building on 2018’s Momentum for Innovation and Growth (March 13, 2019)
The 116th Congress marks another moment of profound political change and an important opportunity to advance policies that meet the needs of Americans and American-based businesses in the 21st century. ...
As the EU Eyes Digital Taxation, Maintaining a Multilateral Approach is Critical (October 29, 2018)
Across the globe, governments are realizing that outdated approaches -- from trade agreements to privacy guidelines – no longer address the needs of the modern economy. In response, many are quickly moving ...
Tech’s Legislative Outlook for 2018: Building on 2017’s Momentum for Modernization (January 11, 2018)
The start of the 115th Congress and new administration not only marked an era of profound political change, but it also presented a unique and timely opportunity to modernize outdated policies. Lawmakers ...
Tech Industry to USTR: Multilateral Solution Essential To Ensure Fair and Principled International Tax System (January 07, 2020)
WASHINGTON —In testimony given today as part of a U.S. Section 301 Committee hearing on the U.S. Trade Representative’s (USTR) investigation into France’s digital services tax (DST), global tech trade ...
ITI Files Comments on OECD’s Pillar One of Digital Tax Work (November 11, 2019)
WASHINGTON – Today, ITI called for the Organisation for Economic Co-operation and Development (OECD) to continue to drive toward a multilateral solution and avoid double taxation in formal comments filed ...
International Tech Trade Reacts to Latest OECD Framework on Digital Tax (October 09, 2019)
WASHINGTON – Today, ITI issued a reaction from Jennifer McCloskey, Vice President of Policy, following the Organisation for Economic Co-operation and Development’s (OECD) release of a Public Consultation ...
Tech Industry Outlines Concerns On French Digital Services Tax; Encourages Multilateral Solution (August 12, 2019)
WASHINGTON –Today, ITI, the global voice of the tech sector, outlined key concerns regarding France’s digital services tax and called for multilateral cooperation to address changes to the international ...
ITI Responds to Advancement of France Digital Services Tax Legislation (July 04, 2019)
BRUSSELS – ITI, the global voice for the tech sector, issued the following reaction to France’s Assemblée Nationale’s advancement of a national digital services tax earlier today. France’s Sénat is expected ...