While today’s announcement signals that the Obama Administration recognizes the critical need for tax reform, the proposal maintains the government’s implicit preference for some industries at the expense of others and fails to maximize the job creation possible through comprehensive tax reform, noted the Retail Industry Leaders Association (RILA).
“While we applaud the President for recognizing the urgent need for reform and stepping forward with a corporate tax reform plan, today’s proposal falls short of the bold reforms that are sorely needed,” said Katherine Lugar, executive vice president for public affairs. “With 12.8 million unemployed Americans looking for work, comprehensive tax reform that spurs investment and job creation can’t come soon enough, but if it’s worth doing, it’s worth doing right.”
The job growth that would result from bold comprehensive tax reform would be pronounced within the retail industry, where in addition to being one of the largest private-sector employers, with nearly 15 million jobs, the retail industry pays among the highest effective corporate income tax rates today.
RILA supports comprehensive tax reform that:
1. Eliminates special preferences that give some an advantage over others
2. Substantially lowers the rate for all business taxpayers
3. Addresses the tax rules applicable to all business types, as well as individual consumers
4. Simplifies and stabilizes the tax code
5. Restores America’s global competitiveness by instituting a territorial tax system
Comprehensive reforms that meet this standard will free companies to invest, grow their businesses, and create new jobs.
“Government shouldn’t use the tax code to pick winners and losers. Unfortunately, the President’s proposal preserves special preferences that give some industries advantages at the expense of others,” said Lugar. “Further, the Administration’s plan effectively maintains the taxation of international income, a harmful policy that is increasingly unique to the United States.”
We look forward to working with the Administration and Congress to pass a comprehensive reform of the tax code that achieves our shared goals of economic growth and job creation,” concluded Lugar.
A territorial tax system, similar to those widely adopted around the world, would focus U.S. taxation on the domestic earnings of U.S. businesses and prevent the double taxation of their foreign operations abroad, which currently puts them at a competitive disadvantage to foreign competitors.
RILA is the trade association of the world’s largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.