The American Made Coalition (AMC) represents a broad collection of industry leaders from every corner of America’s economy, including both small and large businesses. AMC companies collectively employ millions of Americans, either directly or through their suppliers and distributors, and we are proud of our roots here in the United States.
We do business all over the world, import to and export from the United States, and witness every day how a badly broken tax code has restrained our country’s global competitiveness, limited the growth of the U.S. economy, and reduced the number of jobs available to American workers. Our membership continues to grow, and you can find our latest list on our website: www.americanmadecoalition.org.
The American Made Coalition believes 2017 presents the best opportunity to transform our outdated tax code – to create jobs, increase wages, and save taxpayers money. Thirty years have passed since Congress last overhauled the tax code. In that time, most other developed nations have modernized their tax systems and significantly lowered the rates businesses pay. Many of these countries also stopped taxing business income earned beyond their borders.
In contrast, the United States has the highest business tax rates in the developed world, and its worldwide tax system encourages – and often requires – American companies to move their operations, assets, and headquarters to other countries in order to remain competitive or, alternatively, leave themselves exposed to acquisition by foreign-domiciled companies. This hurts American workers. The complexity and distortions brought about by the tax code are a familiar, unpleasant reality for U.S. companies who would far prefer to reinvest in the United States while avoiding a foreign takeover. Comprehensive tax reform gives us a chance to correct those systemic flaws and bring our tax code into the 21st Century by lowering rates and adopting a competitive territorial system.
By transforming our outdated tax code, Congress and the White House can accelerate economic growth by encouraging more business investment and boosting job growth. The nonpartisan Tax Foundation estimates that, taking the entirety of Chairman Brady’s initial proposal, the package would create 1.7 million new jobs, increase wages by 8% and save taxpayers an average of $4,600 a year. However, the study shows that a rate cut alone will not generate that kind of growth. Businesses need more certainty to make the kind of major, long-term investments that would strengthen the economy. The only way to give businesses that certainty is to make permanent reforms to our broken tax system, within the confines of the congressional budget rules.
Tax reform must be a vehicle to make our economy more competitive. Our global competitors have spent the last 30 years modernizing their tax systems, undeniably surpassing the United States. Our broken system encourages companies to shift earnings, operations, and intellectual property to other countries. In other words, our existing system discourages American companies from investing and creating jobs in the United States. We need to end the incentive for companies with a global footprint to invest and create jobs elsewhere; and instead, encourage them to bring their earnings and critical intellectual property back to their U.S. operations. By adopting a destination-based territorial system that only taxes economic activity in the United States at a low, competitive rate, Congress can bring our tax code in line with other developed countries.
This preference for imports has also helped fuel the flood of foreign-made products into the United States, displacing workers across the American economy, from textile workers in the South to appliance-makers in the Midwest. We might not be able to address all the advantages low wage countries have over American workers, but we can end the tax code’s bias for goods and services produced in other markets, while also building an economy that attracts high-tech manufacturing and information services jobs to the United States.
AMC member companies compete in almost every market in the world. We believe in free trade and open markets. But we also see firsthand how the U.S. tax code disadvantages American companies, both here and abroad. We do not support new barriers to imports; we just want to see Congress modernize our tax code to bring it in line with the rest of the developed world. The global economy is a lot different than it was in 1986, the last time Washington came together to overhaul the tax code, and we are long overdue for major changes that will make our economy more competitive.
In that vein, a simple, temporary rate cut would not go far enough to address these challenges. In order to generate the kind of growth our economy needs, we need an international tax system that makes the U.S. competitive on a global scale. This is why we are so encouraged that Congress and the White House have outlined bold proposals to rework the tax code. Transformational change is long overdue, and we applaud policymakers at both ends of Pennsylvania Avenue for making the most of this moment by pushing for big changes that will reinvigorate our economy and level the playing field for American workers.
The American Made Coalition supports pro-growth tax reform that creates and sustains American jobs, revitalizes American communities and levels the playing field for American businesses and workers. We appreciate the leadership demonstrated by members of the Ways and Means Committee in this debate, encouraging Congress and the White House to embrace game-changing policies. And we applaud the White House for unveiling an outline for comprehensive reform and giving tax reform what it has been missing for years – leadership from the President of the United States. As the process advances, we hope lawmakers continue to think big and enact the kind of change that will propel our economy into the 21st Century.