Written Testimony of Dr. Elaine C.
Kamarck and James P. Pinkerton
Co-Chairs, Reforming America’s Taxes Equitably (RATE) Coalition
U.S. Senate Finance Committee Hearing
"Jobs and a Healthy Economy”
January 22, 2015
www.RATEcoalition.com
[email protected] | 866-832-4674 | P.O. Box 33817, Washington DC, 20033
Written Testimony of Dr. Elaine C. Kamarck and James P. Pinkerton
Co-Chairs, Reforming America’s Taxes Equitably (RATE) Coalition
U.S. Senate Finance Committee Hearing
"Jobs and a Healthy Economy”
January 22, 2015
Thank you, Chairman Hatch and Ranking Member Wyden, for convening this hearing to
address a pressing challenge facing our country today – safeguarding a legacy of secure,
well-paying jobs for U.S. workers. This Committee has done great work leading the charge
toward restoring our nation to the land of job opportunity it once was.
We are Elaine Kamarck and James P. Pinkerton, the bipartisan co-chairs of the Reforming
America’s Taxes Equitably (RATE) Coalition. Our collective membership, comprised of
thirty-three diverse businesses and trade associations aims foremost to achieve tax reform
that secures a lower, internationally competitive tax rate for all businesses. We believe
strongly that such a competitive tax rate will allow family-owned companies, firms, and
large corporations to continue to invest, grow and hire here in the U.S.
With the economy serving as the primary focus of this hearing, we readily cite data from an
Ernst & Young study commissioned by RATE Coalition last year which quantified the
alarming impact of our high corporate tax rate on U.S. fiscal health. The study found GDP
was an estimated 1.2% to 2.0% lower – translating into a loss of roughly $235 – $345
billion each year. Similarly, workers’ wages were found to be diminished by 1.0 to 1.2%
due to our uncompetitive business tax code.
Each year we allow our outdated corporate tax code to run rampant, added financial
pressure mounts on companies and business owners – most who must find ways to cut
corners elsewhere – whether that’s laying off workers, delaying investment or expansion,
or spending less on research and development.
RATE Coalition’s membership represents a diverse array of industry sectors – including
retail, telecommunications, and defense, among others. Collectively, our members employ
over thirty million Americans and operate in all fifty states. Our expansive company
footprint also gives us a first-hand look into the international business marketplace where
U.S. companies must operate and compete.
For example, Boeing, a leader in the aerospace industry, is a RATE member company that
employs 165,000 workers across the U.S. Boeing’s Chief Financial Officer Greg Smith
attests to this Committee that the increasingly competitive global market, as well as
burgeoning new technologies and the industries that bring these products to consumers all
over the world, reinforce the need for the U.S. to lower its corporate rate to an
internationally competitive level.
His statement for the record can be found below:
www.RATEcoalition.com
[email protected] | 866-832-4674 | P.O. Box 33817, Washington DC, 20033
“The aerospace industry is facing increasing competition from established and emerging
players across the globe as nations see the transformative power of innovation in
delivering highly-skilled and high-paying jobs. With a significant portion of our 165,000
employees, research and development activities and manufacturing operations located
across the United States, we support continuing efforts to improve the country’s
competitiveness. That is critical for the United States to build on its leadership in aerospace
and other sectors. We believe that reforming the tax code, which includes a globallycompetitive corporate tax rate, will make the U.S. a more attractive place to do business
and provide a strong boost for continued innovation and growth.”
We are optimistic the 114th Congress will build on existing momentum for pro-growth
policies to make great progress in the areas of tax reform that will strengthen our economy
– especially the widely supported goal of business tax reform. And we note this momentum
is bipartisan: Treasury Secretary Jack Lew recently highlighted areas of potential common
ground during his speech on business tax reform to the Brookings Institution; indeed, he
has made the pro-reform argument on many different occasions.
Specifically, we were encouraged to hear the Administration’s acknowledgement of an
existing bipartisan pathway to achieve comprehensive business tax reform that makes the
tax code more competitive. Truly, the consensus for tax reform has resonated in
Washington and sits high on a list of legislative priorities most ripe for action in the coming
months.
In addition, we believe that the most effective tax reform should concentrate on the goals of
simplifying the code and lowering rates. Efforts to direct revenues raised by tax reform to
other purposes risk reducing the important economic effects of reform on growth.
Repatriation that is not part of comprehensive tax reform is only a band-aid solution to an
ailing illness.
This point – that repatriation standing on its own is the opposite of true tax reform –
cannot be reiterated enough. Comprehensive tax reform that applies to all businesses,
simplifies the code, and lowers the rate will relieve American businesses of a stifling tax
burden that has driven many in the business community to seek haven outside the U.S in
recent years, through corporate inversions and similar tax avoidance maneuvers.
Moreover, these short-term fixes will only give a false sense of accomplishment that some
degree of tax reform has been achieved when – in reality – no true progress has been made
to update our wildly outdated and burdensome tax code. This can only lead to more
economic harm than good in the long run – and will only be kicking the can down the road.
Toward this end, we believe the time for real reform has come, however, there is still work
to be done to refine the most advantageous components of tax reform that will benefit all
businesses. Most imperative will be a lower corporate tax rate that allows the U.S. to
compete globally.
www.RATEcoalition.com
[email protected] | 866-832-4674 | P.O. Box 33817, Washington DC, 20033
We are optimistic the Administration and Congress will come together to work alongside
this Committee to bring forth favorable tax reform legislation that broadens the base,
simplifies the code and makes the U.S. a better place for businesses to thrive. We appreciate
this opportunity to present our Coalition’s case for business tax reform to this esteemed
Committee.
www.RATEcoalition.com
[email protected] | 866-832-4674 | P.O. Box 33817, Washington DC, 20033