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Public Statements

H.R. 5962 , The American Business Competitiveness Act

Floor Speech

Location: Washington, DC

* Mr. MAFFEI. Madam Speaker, no one likes to pay taxes. The people in my district and all throughout our country work hard to make a living, and especially in tough economic times, it is difficult to give up a portion of that hard-earned money. But, most citizens also appreciate that our taxes allow us to have the country we do--our taxes allow us to send our children to school, to keep our country safe, to provide Social Security, and to maintain our way of life.

* In the words of Franklin Delano Roosevelt, ``Taxes, after all, are dues that we pay for the privileges of membership in an organized society.''

* Yet, while many of our hard-working citizens understand this fact, they do not understand why our current tax code is riddled with loopholes. They don't like that certain people and certain industries--especially those with high-paid lobbyists and heavy influence in Washington--get special breaks. They do not understand why some people and some companies get out of paying their fair share of taxes, or why we reward companies with tax breaks for sending jobs overseas.

* The worst of these special breaks allow companies to take advantage of U.S. tax deductions on income they make overseas. It actually rewards companies for taking business--and jobs--out of our country and sending them to China or India or elsewhere. Under current law, corporations can defer taxes on business income they earn through foreign companies while they take deductions related to that income when they pay U.S. taxes. In effect, we are encouraging corporations to ship jobs overseas--and then telling the American taxpayer to give them a special tax break! Not only is this provision unfair to taxpayers, it is unfair to companies that keep their operations in the U.S. and try to preserve American jobs.

* Those are the businesses that employ our hard-working citizens and keep our economy afloat. Those businesses look at our complicated tax code and cannot understand why their competitors that ship jobs overseas are favored with special breaks. And they don't understand why the United States has a higher corporate tax rate than most other industrialized nations--which brings me to my second point. At the same time we're creating loopholes for some, we're putting our entire business community at a competitive disadvantage in the worldwide market.

* China's corporate tax rate is 25%.

* The United Kingdom's corporate tax rate is 28%.

* Japan's corporate tax rate is 30%.

* The United States' top marginal corporate tax rate? 35%.

* The bill I'm proposing today aims to fix both of these problems. First, it will eliminate the irresponsible tax loopholes that only benefit certain sectors of certain industries. One loophole my bill closes, for instance, currently allows foreign corporations to avoid paying taxes on income they earn in the United States by funneling the money through different countries where we have tax treaties. This misuse must stop. We must strive to make our tax system fairer.

* And secondly, I do not believe that the revenue raised by closing these loopholes should just be thrown back into the federal budget. Instead, I think we should use this revenue to help boost the competitiveness of our entire business community, by sharply reducing our corporate tax rate, to 23%. This is a major tax cut that would allow companies from upstate New York and around the country to better compete in the global economy--and it would ensure that all companies benefit, not just those with good lobbyists. Between revenue raised by closing these egregious tax loopholes and added economic stimulus of lower corporate tax rates, this legislation provides a good balance.

* This competitive tax rate will give us back an edge--an edge over China and other countries whose tax laws have attracted corporations to move American jobs overseas in the first place. Our taxpayers, our businesses and our country deserve better, and this bill is a crucial first step toward making our tax system fairer for everyone.

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