From The FACT Coalition <[email protected]>
Subject FACT Coalition Calls on Congress to End ‘America-Last” Tax Policies
Date October 17, 2024 7:40 PM
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FOR IMMEDIATE RELEASE:
October 17, 2024
Read this release on our website

FACT Coalition Calls on Congress to End 'America-Last" Tax Policies

Long-Overdue International Tax Changes Would Level the Playing Field, Raise More Than a Trillion Dollars in Revenue, and End Incentives for Offshoring

WASHINGTON, DC - On Tuesday, October 15, FACT submitted official comments to the House Ways and Means Committee's Republican Tax Team for Global Competitiveness calling on lawmakers to help level the playing field for wholly domestic businesses by addressing unfair tax breaks given to U.S.-based multinational corporations. The reforms proposed in FACT's comment would raise more than one trillion dollars in new revenue and end tax incentives for U.S. multinationals to shift jobs and profits offshore.

These reforms include structural changes to the U.S. global minimum tax regime (the Global Intangible Low-Taxed Income, or "GILTI" regime), and repealing the Foreign-Derived Intangible Income (FDII) deduction, which provides a wasteful tax break for exports to foreign markets. Such tax advantages are not available to small- and medium-sized domestic firms. Moreover, both GILTI and FDII contain provisions that substantially reward the offshoring of tangible assets like warehouses, offices, and factories, along with accompanying U.S. jobs.

Zorka Milin, FACT policy director, said in a statement:

"Right now, we have an America-last tax code that unfairly punishes U.S. entrepreneurs, domestic businesses, and workers by putting a finger on the scale for large multinational corporations, who can play sophisticated accounting games to move earnings to tax havens. Profits booked in Singapore should be taxed the same as those in Springfield.

"By building on the tools provided by the 2017 tax law, Congress can raise substantial revenues and eliminate incentives baked into our tax code that harm American workers and disadvantage domestic small businesses. Doing so would help to create a level playing field for all businesses in which hard work and innovation - not harmful and discriminatory tax breaks - determine success."

Notes to the Editor:

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Read FACT's full comment to the House Ways and Means Committee's Republican Tax Team for Global Competitiveness here.

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Similar reforms to those proposed in FACT's comment have been scored by the Joint Committee on Taxation (JCT) and independent researchers as raising substantial revenues - in excess of $1 trillion - over ten years. Specifically:

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In 2021 the JCT estimated that a suite of international tax reforms, including a 21 percent global minimum tax (GILTI) applied on a country-by-country basis and a full repeal of the FDII deduction as raising $1.02 trillion over ten years.

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A recent Penn-Wharton Budget Model estimate for fiscal years 2026-2035 predicts that repealing the FDII deduction and reforming GILTI would raise $1.2 trillion on a conventional basis.

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In May, FACT released a policy platform detailing important international tax reform priorities to guide the 2025 tax debate. These priorities form the basis for the recommendations made in Tuesday's comment.

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A recent FACT sheet calls on Congress to repeal the FDII deduction, which provides a massive handout to a relatively small number of super-profitable corporations, predominantly in the tech sector.

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About the FACT Coalition

The Financial Accountability and Corporate Transparency (FACT) Coalition is a non-partisan alliance of more than 100 state, national, and international organizations working toward a fair and honest tax system that addresses the challenges of a global economy and promoting policies to combat the harmful impacts of corrupt financial practices.

For more information, visit www.thefactcoalition.org.

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