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.
- Principles for a Solution in the OECD's Project for Addressing the Tax Challenges of the Digitalization of the Economy (May 20, 2020)
- Remote Worker Relief Multiassociation Letter (July 02, 2020)
- ITI Cloud and Digital Content Regulations Testimony (February 11, 2020)
- ITI OECD Pillar 2 Comments (December 02, 2019)
- ITI Cloud and Digital Content Transactions IRS Comments (November 13, 2019)
What's to Come in the Future of the Global Tax System (October 28, 2020)
The Organisation for Economic Co-operation and Development (OECD) announced in October 2020 a revised goal of mid-2021 for reaching political agreement in negotiations to address tax challenges arising ...
How Tax Tools Can Help the U.S. COVID-19 Response and Economic Recovery (May 14, 2020)
As we continue to look for ways to address the immediate impacts of the COVID-19 pandemic and reinvigorate the economy, tax policy provides a powerful tool. These measures afford policymakers with the ...
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. ...
ITI Welcomes Introduction of American Innovation and R&D Competitiveness Act (February 25, 2021)
WASHINGTON — Today, global tech trade association ITI welcomed the introduction of the American Innovation and R&D Competitiveness Act in the U.S. House of Representatives. The Act, introduced by Representatives ...
ITI Calls on EU to Recommit to Multilateral Approach to Address Tax Challenges of the Digitalising Economy (February 11, 2021)
BRUSSELS – Today, global tech trade association ITI asked the European Commission to forgo its consideration of an EU-level digital levy and instead redouble its efforts to ensure that EU Member States ...
Tech Industry Outlines Agenda to Drive U.S. Global Competitiveness (January 25, 2021)
Recommendations on Privacy, Broadband, Data, and More Shared with Biden-Harris Administration, Congressional Leaders WASHINGTON – Today, global tech trade association ITI released a comprehensive, pro-innovation ...
ITI Statement on USTR Section 301 Reports on UK, Spain, and Austria Digital Services Taxes (January 14, 2021)
WASHINGTON -- Today, global tech trade association ITI issued the following statement reacting to the release of Office of the U.S. Trade Representative’s (USTR) reports on its Section 301 investigations ...
ITI Shares Tech Policy Recommendations to Support Economic Recovery with Biden-Harris Transition Team (December 15, 2020)
WASHINGTON – Today, global tech trade association ITI outlined a set of policies the Biden-Harris Administration can adopt to ensure that the U.S. technology sector can continue to serve as indispensable ...