U.S. Chamber Warns Against Misguided Tax Reforms

WASHINGTON, D.C. – The United States Chamber of Commerce warned against tax proposals, designed by politicians to win popular support, which would undermine U.S. economic growth and cost American jobs.

"It's wrong to wave the 'white flag' for U.S. companies that are competing in the world-wide marketplace," said Bruce Josten, Chamber executive vice president. "Politically-motivated tax proposals based on fears of outsourcing will hurt U.S. companies abroad, undermine competitiveness and cost U.S. jobs."

Senator John Kerry (D-Mass.) has proposed eliminating tax deferrals that are aimed at keeping American companies competitive with foreign multinationals and reducing the 35% corporate tax rate to 33.25%, according to news reports.

Raising taxes on U.S. companies that do business abroad will only make these companies less competitive, less profitable, and less likely to create new jobs at home or abroad. In the end, it will lead to higher prices, less investment and fewer jobs.

Under Kerry's proposal, businesses that operate both in the U.S. and overseas would pay higher taxes than companies that operate exclusively inside the U.S.

"Pitting U.S. companies against each other is not wise economic policy," said Josten. "And raising the top individual tax bracket across the board – which will hurt millions of small businesses that create most of the new jobs in America – to pay for a targeted tax cut will interrupt our economic recovery.

"The best way to create jobs is to build strong and sustained economic growth. Economic growth fuels long-term demand, which results in more jobs. The impediments to hiring – sluggish growth, over regulation, tort concerns, the lack of an energy policy – are not erased by a one-time payroll tax credit," said Josten.

The U.S. Chamber of Commerce is the world's largest business federation representing more than three million businesses and organizations of every size, sector and region.

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