A leading group of business executives is urging members of the bipartisan debt “supercommittee” to work toward a comprehensive reform of the tax code, not just closing tax loopholes and ending targeted subsidies.
In a letter Thursday to supercommittee members and congressional leaders, Business Roundtable President John Engler wrote that the 12 lawmakers on the panel “will face pressure to target narrow tax provisions, adding up to billions of dollars, possibly using revenues to meet deficit-reduction goals.”
“We urge you to resist this piecemeal approach to tax reform,” Engler wrote. “Deficit-reduction efforts will only succeed in the long term when done comprehensively. Everything should be on the table, including fundamental tax and entitlement reform, elimination of programs and government restructuring.”
Throughout the debt debate, Democrats have called for closing tax loopholes benefiting business and the wealthy, as well as for elimination of tax subsidies aiding specific sectors such as the oil and gas industry. Republicans have argued that such moves would do little to reduce the deficit and would negatively impact the economy.
One thing both sides have expressed a willingness to consider is comprehensive tax reform – a task the Business Roundtable urged lawmakers to take up as the supercommittee begins its work in the coming weeks.
“America’s corporate tax rate ranks at the highest among industrialized nations, and our worldwide system of taxation discourages investment in the United States,” Engler wrote. “As a result, we need a competitive tax code with a lower corporate rate and a competitive territorial system like the rest of the world. Implementation of such a system will provide the economic growth to generate additional revenue for deficit reduction.”
A previous letter sent by a coalition of business executives to members of Congress and the White House last month urged leaders in Washington to reach an agreement on avoiding default. But the letter did not mention whether lawmakers should consider provisions to increase tax revenue, partly due to disagreement among business leaders on the issue.