The tax-reform framework the President and Congressional leaders unveiled earlier this week would end a penalty that makes American companies less competitive than their foreign rivals.
The current tax code imposes tougher rules on American businesses competing abroad than foreign companies doing business here. That's because we slap higher taxes on the foreign earnings of U.S. firms than most of our trading partners levy on their own companies selling goods and services in the U.S. This makes foreign companies more profitable and more enticing to outside investment. The framework introduced this week would correct the imbalance by eventually retiring the penalty on American businesses that compete abroad.