Letter Supporting H.R. 507, Which Would Reduce the Tax Rate on Corporate Repatriation of Income Earned Abroad

January 15, 2009

The Honorable Charles Rangel

Chairman

Committee on Ways and Means

U.S. House of Representatives

Washington, DC 20515

The Honorable Dave Camp
Ranking Member
Committee on Ways and Means
U.S. House of Representatives
Washington, DC 20515

Dear Chairman Rangel and Ranking Member Camp:

The U.S. Chamber of Commerce, the world's largest business federation representing more than three million businesses and organizations of every size, sector, and region, urges you to support H.R. 507, which would reduce the tax rate on corporate repatriation of income earned abroad.

In the American Jobs Creation Act of 2004, Congress created a time window in which companies could repatriate foreign profits and pay a reduced tax rate of 5.25% rather than the full income tax rate. The tax change resulted in more than $350 billion dollars of repatriated profits and a windfall to the Treasury of about $18 billion in tax revenue it might not otherwise have received.

In today's uncertain economic environment, repatriation could have a positive impact on the economy. Repatriated earnings could be used for a number of laudatory purposes, including but not limited to, ameliorating some of the liquidity challenges confronting companies, relieving some stress on the commercial paper market, increasing funds available for businesses to meet payroll obligations and conduct R&D activities, and to meet funding obligations for pension plans. Again, all of this could be achieved while producing a positive revenue effect for the U.S. Treasury.

As the Committee considers ways to aid in economic recovery, the Chamber urges you to consider using the powerful tool of repatriation. Giving America's economy more liquidity and raising revenue for the Treasury is an important step towards bolstering confidence in the financial markets.

Sincerely,

R. Bruce Josten

Cc: Members of the Committee on Ways and Means