Antiquated tax policies inhibit US competitiveness
Washington, DC — September 20, 2012 —
Following hearings and new report from the Senate Permanent Subcommittee on Investigations, the Business Software Alliance today urged Congress to reform corporate tax laws to boost US competitiveness and promote technology innovation.
“America’s corporate tax structure was designed for an era of manufactured hard goods and limited overseas sales. It’s holding us back in the digital age,” said BSA President and CEO Robert Holleyman. “The hearings and report issued today by the Senate’s Permanent Subcommittee on Investigations underscore the need for a comprehensive overhaul of the corporate tax code to bolster US competitiveness.”
“We have the highest corporate tax rate of any OECD country, and we are an outlier in taxing the worldwide income of domestic corporations,” Holleyman said. “We also do ourselves no favors by requiring global businesses to pay residual taxes when they try to invest earnings from foreign subsidiaries here at home.”
“America’s corporate tax laws are not competitive with other leading economies,” said Holleyman. “To catch up, we should lower the marginal rate for corporations and reform the system in ways that encourage technology innovation. For example, the R&D tax credit should be made permanent so companies can plan to invest in long-term projects. We also need the system to be simpler and more transparent overall, so it’s easier for corporations to comply with and easier for authorities to administer.”
“These kinds of reforms are long overdue,” Holleyman said. “Software companies rethink the code in their products all the time. That’s how an industry that started here in the US just a few decades ago has quickly grown to lead the world. Compare that to America’s corporate tax code, which is largely a holdover from the 1960s. It’s a big disadvantage that is catching up with us.”
The Business Software Alliance ( www.bsa.org ) is the leading global advocate for the software industry. It is an association of more than 70 world-class companies that invest billions of dollars annually to create software solutions that spark the economy and improve modern life. Through international government relations, intellectual property enforcement and educational activities, BSA expands the horizons of the digital world and builds trust and confidence in the new technologies driving it forward.