Dear Senator:
On behalf of the Center for the Advancement of Capitalism (CAC), a non-profit corporation
organized to promote the social welfare of the nation by presenting a
moral foundation for individualism and economic freedom, I am writing to
express our opposition to S. 2119, the “Reversing the Expatriation of
Profits Offshore Act”, which was introduced by Sen. Grassley of Iowa.
A
present threat to the American pursuit of prosperity is our
fundamentally flawed system for paying for the cost of government. One
example is that in the face of intense tax competition among the nations
of the world, the current US tax system unfairly taxes wealth earned
overseas. Except for the
United States,
no major country taxes corporate revenue earned abroad. The result is
that American companies operating overseas are forced to compete on an
unfair playing ground against foreign companies that do not pay the same
taxes. This policy threatens American jobs and American ownership of
businesses.
In
the face of this injustice, Congress has evaded its responsibility to
fix the flawed laws which cripple American companies and threaten
American jobs. As it is the people that ultimately pay taxes, every
dollar of unfair “corporate tax” must come either from decreased
shareholder returns on investment, decreased employee wages, or
increased customer prices.
As
a defense against unjust corporate taxes, some American companies have
created paper headquarters in tax havens, choosing to legally
incorporate there, while their day-to-day operations remain in the US.
As a result, jobs and profits stay in America, but the companies escape
the unfair US tax treatment that their foreign competitors do not
suffer.
Yet
American companies such as Fruit of the Loom, Ingersoll-Rand, Nabors
Industries, PricewaterhouseCoopers Consulting, Seagate Technologies,
Stanley Works, Tyco International, and Weatherford International, just
to name a few, are all being pilloried for reincorporating in overseas
tax havens. Unlike the unfair corporate taxes US businesses are forced
to pay, these reincorporations do not threaten a single American job or
close any American plants. Instead, these companies are now able to
compete on the same footing as companies from every other major country
in the world.
Yet
rather than correct the conditions that compel US firms to seek
protection from unjust and destructive taxation, some members of
Congress propose to outlaw these reincorporations and legally force
business owners to keep their firms in the US, even if it means the loss
of American jobs and the destruction of American businesses.
The
current state of affairs is unacceptable. You must not perpetuate a tax
regime that makes it impossible for American companies to do business.
Our lives and our prosperity depend on our ability to work free from
unjust shackles. We demand Congress protect our rights.
Accordingly, CAC calls
upon you to vote against S. 2119 and work to immediately address the
unfair and destructive tax bias against US corporations.
Sincerely.
Nicholas Provenzo
Chairman
