Some have welcomed Obama’s call for immediate action on a reduction of the corporate tax rate, while others feel the budget proposals are inconsistent with the President’s stated objectives. Read the reaction below.
The budget can be accessed here, and International Tax Review’s analysis can be found here.
REACTION
Jay Timmons, president and CEO of the National Association of Manufacturers
“The President’s tax proposals seem more focused on providing good campaign rhetoric than serious solutions.”
Hank Gutman, principal at KPMG, former chief of staff for the Joint Committee on Taxation, former deputy tax legislative counsel in the Treasury Department Office of Tax Policy
“The budget document does not present a comprehensive view of tax reform. It fails to state a target corporate rate and consequently provides no guidance as to what revenue sources would be used to offset any rate reduction.
The proposed minimum tax on offshore earnings is an expansion of the current system of worldwide taxation and an explicit rejection of a territorial system.”
John Engler, president of the Business Roundtable
“The budget proposals would add complexity and uncertainty when what’s needed is comprehensive reform of our tax system. The rest of the world is not taking the year off because we’re having an election. They’re continuing to improve their competitive posture. We cannot afford to use election-year politics as an excuse for inaction.”
Philip West, partner and tax practice chair at Steptoe & Johnson, and former international tax counsel at the Treasury Department
“Many of the provisions that affect international business are the same as those included in prior budgets, so from that perspective the budget is not surprising. Some new provisions have been added but they continue to follow the line that the administration has taken. We expect a proposal in the coming weeks more specifically directed at tax reform for multinational business and it will be interesting to see what that contains. In any event, it is doubtful that any of the proposals will be enacted this year.”
Catherine Schultz, vice president for tax policy, National Foreign Trade Council
“Countries around the world are promoting the international competitiveness of their companies and creating jobs by adopting modern tax laws that enhance the ability of their locally-headquartered companies to serve foreign markets. The Administration’s proposed budget provisions would move in the opposite direction.”
Andrew Lyon, tax policy economist and principal in the National Economics & Statistics group of PwC
“The President’s international tax proposals in the budget carry over proposals from prior budgets that would significantly increase taxes related to overseas operations of American companies. These proposals would represent a significant change in the tax treatment of foreign earnings, and would move the US in the opposite direction from the participation exemption systems in force in most OECD countries.
The proposals – and the expected call by the President for a minimum tax on foreign earnings in a proposal to be released later this month – are in sharp contrast to recent Congressional proposals for an exemption system and will set up a significant debate on the appropriate direction for tax reform.”
Dean Garfield, president of the Information Technology Industry Council
“Unfortunately, rather than offering a spring-board for growth, the President has put forward a tax framework in his budget proposal that will serve as quicksand for the country’s competitiveness.
The Administration’s proposal would make the US tax system even less competitive and leave America’s global-leading companies and their employees vulnerable. It is time for a tax reboot by moving to a competitive territorial system with increased innovation incentives that will encourage investment in the US economy.”
Jim Fuller, partner at Fenwick & West
“The President’s international proposals are largely a repeat of his prior years’ budget proposals. They are very anti-business, and will not be well received in Congress. They go in a direction opposite from the direction of most other countries these days, which seem headed in more of a business-friendly direction, such as the UK and Japan when they moved to a territorial approach. The US is an outlier these days in this regard.”
