News & Insights

Washington DC – The National Foreign Trade Council (NFTC) today commended the Obama Administration for recognizing the need for lowering the corporate tax rate, but expressed disappointment that the Administration’s framework would, unlike other countries, impose additional tax on the foreign earnings of U.S. companies trying to compete in foreign markets ultimately hindering U.S. global competitiveness.

NFTC Vice President for Tax Policy Catherine Schultz released the following statement:

“The NFTC is pleased that the Administration has acknowledged the need for corporate tax reform, however, this proposal does not address the need for comprehensive reform to ensure global competitiveness of worldwide American companies.

“While the majority of developed countries have lower corporate tax rates and do not impose home country taxation of foreign earnings, we are disappointed that the Administration is continuing to move in exactly the opposite direction by continuing to support imposing additional U.S. corporate income tax on foreign earnings. In fact, the President’s own Bowles-Simpson Commission recommended abandoning the worldwide system of taxation and moving to a territorial system. Additionally, by eliminating many of the provisions that enable worldwide American companies and their employees to compete globally, the Administration’s plan will hurt U.S. jobs at a time when the U.S. economy cannot afford a further retrenchment. The Administration’s framework would also move the U.S. further out of sync with the rest of the world.

“Countries around the world are modernizing their tax systems to enhance the ability of their locally-headquartered companies to serve foreign markets. The Administration’s proposal tinkers around the edges and would move the United States in the opposite direction of our trading partners – making U.S.-headquartered companies even less competitive than today and discouraging new companies from headquartering in the U.S.

“A reduction in the corporate rate is welcomed, but further reform of the tax system is needed to modernize our outdated international tax law in a manner that promotes U.S. economic and job growth.”