Pharmaceutical companies joined other US-based companies in sending a letter to US Congressional leadership in support of business tax reform that would end what it termed as “Made in America’” tax on domestic production and to make the US tax code competitive in the global economy.
The group, the America Made Coalition, consists of 16 companies, which includes representation from the pharmaceutical, life-sciences, and chemical industries: Celgene, Celanese, Cook Medical, The Dow Chemical Company, Eli Lilly and Company, GE, Johnson & Johnson, Merck & Co., and Pfizer, Other companies part of the coalition are: Blue Diamond Growers, The Boeing Company, Caterpillar Inc., CoorsTek, Honeywell, McIlhenny Company, Oracle, Qualcomm, Raytheon Company, S&P Global, United Technologies Corporation, and Varian Medical System.
The letter, sent to the Speaker of the House Paul Ryan (R-WI), Senate Majority Leader Mitch McConnell (R-KY), House Minority Leader Nancy Pelosi (D-CA), and Senate Minority Leader Chuck Schumer (D-NY), provides support for a tax reform plan by Speaker Ryan and House Ways and Means Committee Chairman Kevin Brady (R-Texas) that would lower corporate business tax rates, allow expensing of capital expenditures, and allow for what the Coalition terms a “more competitive territorial approach to taxing businesses,” referring to reforming border tax measures that would exclude taxation on US exports while imposing a tax on imports to the US.
In an informational package, the Coalition says that the US is the only country among the 35 members of the Organization for Economic Co-operation and Development (OECD), an intergovernmental economic association comprised of high-income developed countries and emerging economies, and five BRICS countries (Brazil, Russia, India, China, and South Africa) that does not have a border adjustable tax system. The Coalition says that under the current tax system, US-based businesses that produce products and services domestically are subject to higher taxes than products and services imported from foreign countries. “Border adjustment will remove what has effectively been a tax subsidy on imports by imposing the same tax on imports that we impose on domestic products,” said the Coalition. Under the border adjustment, companies that invest and employ people in the US would have their exports exempt from tax while companies that invest overseas would have a tax imposed on their products when they import them to the US. “This system, a version of which is used by over 160 countries around the world, ensures that products imported into the US should bear the same tax burden as products produced domestically,” said the Coalition in the informational package.
The Coalition is also urging for a lowering of federal corporate business taxes. According to 2014 data from the OECD, the combined federal and state statutory corporate tax rate for the US is 39.1% while the average of the other members of the OECD is 24.8%. “We [the US] have the highest business tax rate in the developed world and are one of the few countries that taxes business income on a worldwide basis,” said the Coalition in its letter to Congressional leadership.
Source: The American Made Coalition