Business Roundtable member company, 3M, hosted the inaugural event in St. Paul, Minnesota, and Louis Chenevert, who chairs the Business Roundtable’s Committee on Tax and Fiscal Policy, welcomed the work of House Ways & Means Committee chairman Camp and Senate Finance Committee chairman Baucus.
“We applaud chairmen Baucus and Camp for their bipartisan effort to highlight the benefits of comprehensive tax reform to individuals and businesses across America,” said Chenevert, who is also chairman & CEO of United Technologies Corporation. “America’s business leaders stand united in our support for a comprehensive approach to creating a modern, competitive tax system, and we look forward to working with all policymakers to enact real reform that will help the US economy prosper and grow.”
3M is one of the companies that has tried to make the “stretch” of getting the corporate tax rate to 25% easier by indicating its willingness to put all of the corporate tax breaks it benefits from on the table for removal if it means a lower rate can be achieved.
But Baucus conceded that achieving a rate as low as 25% – close to the OECD average and the rate desired by House Republicans – could be too difficult.
“To be honest, I think 25% is a bit of a stretch,” he said.
Camp responded to reform-sceptics by saying that any such undertaking will go through periods where it appears action will never come.
“In the end, it is going to have to be a bipartisan Bill,” he said. “In the middle, it always looks like failure. The object is to get past that.”
The Summers plan
Meanwhile, Larry Summers, Harvard professor and former US Treasury Secretary, has proposed his own tax reform plan. Summers thinks the US should “eliminate the distinction between repatriated and un-repatriated foreign corporate profits for US companies and tax all foreign income (after allowances for taxes paid to other governments) at a fixed rate well below the current US corporate rate of 35%, perhaps about 15%”.
However, while this could remove the problem of US companies holding vast amounts of income abroad (estimates range from $1 trillion to $2 trillion), worryingly for taxpayers, Summers would also retrospectively impose a similar tax on accumulated profits held overseas.
