Senate Committee Examines Lowering Corporate Tax Rate

The Senate Finance Committee held a hearing July 27 to investigate whether corporate executives could accept the loss of some corporate tax breaks in exchange for lower tax rates. Most of the executives in attendance said they would make the trade. “If the result is comprehensive reform, we support getting rid of existing incentives that currently benefit some industries over others,” Walmart CEO Mike Duke said. “In fact, we will give up the existing incentives that benefit us, if it means getting rid of them all in a simplified, more competitive, and territorial system. Taking these steps to reform America’s tax code will help American companies compete abroad.”

Duke also noted that foreign competitors pay less in corporate income taxes than their American counterparts. Kimberly-Clark Chairman and CEO Thomas Falk agreed that the U.S. tax code puts American multinationals at a disadvantage.

“The combination of a high statutory tax rate, taxation of worldwide earnings, and the complexity of our tax rules creates an uncompetitive tax environment for U.S.-based companies and discourages investment in the U.S. economy,” he said.

Senate Finance Committee Chairman Max Baucus (D-Mont.) said that the tax code needed improvement to help preserve well-paying jobs in the United States.

“We need to work to improve the tax code to help U.S. businesses create good-paying jobs here at home and better compete in the global economy,” Baucus said. “Americans deserve a tax code that helps get them back to work and spurs widespread prosperity and growth.”

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