[Congressional Record Volume 156, Number 114 (Friday, July 30, 2010)]
[Extensions of Remarks]
[Page E1531]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          H.R. 5962, THE AMERICAN BUSINESS COMPETITIVENESS ACT

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                         HON. DANIEL B. MAFFEI

                              of new york

                    in the house of representatives

                         Friday, July 30, 2010

  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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