Camp Tax Proposals Bad for America

Contact Bob Keener, 617-610-6766 or bobkeener@businessforsharedprosperity.org 

(October 26, 2011) - Business for Shared Prosperity (BSP), a national network of business owners and executives, opposes today’s tax reform proposal by House Ways and Means Chairman Dave Camp (R-MI), which includes lowering the top rate paid by America’s largest businesses and wealthiest individuals to 25 percent. Scott Klinger, Tax Policy Director for BSP said, “The Camp proposal violates three basic principles that should be the foundation of tax reform: 

• Corporate tax reform should not reward corporations that have disguised U.S. profits as foreign earnings with either a short or long-term discount tax rate.
• Corporate tax reform should be revenue positive. It makes no sense to freeze the corporate share of federal revenues at historically low levels.
• Individual tax reform should restore more progressivity to the tax system, not reduce top rates even more.

“Mr. Camp’s proposal rewards those U.S. multinational corporations which have successfully gamed the tax system by disguising their U.S. profits as foreign earnings, with a discounted 5.25 percent tax on these earnings. Only 10,000 of the nation’s 27 million businesses have any foreign income and would benefit from this provision. In 2004, when a similar tax holiday was temporarily granted just 837 American businesses claimed billions of dollars of tax relief. Shifting to a territorial tax system creates a permanent tax holiday for firms that shift profits,  investments and jobs offshore. While Mr. Camp proposes tightening the tax code to prevent some abuses in the future, it does not eliminate the opportunity for transfer pricing abuse and other gaming of the tax code.

“By also lowering the top rate of individual taxpayers to 25 percent, Mr. Camp purports to protect the nation’s small business owners whose business profits pass-through to their personal income taxes. The vast majority of the nation’s small business owners are already in the 25 percent tax bracket or below, and would gain no benefit from the tax cuts proposed by Mr. Camp. Instead, small businesses would suffer even more competitive disadvantage and our economy further damaged from insufficient public revenues and investments.”

Business for Shared Prosperity is a network of forward thinking business owners, executives and investors. It has co-sponsored a business petition against corporate tax haven abuse, and a business petition for positive corporate tax reform. The website is http://businessforsharedprosperity.org.