Hatch, Camp Call on Business Community to Embrace Comprehensive Tax Reform

WASHINGTON - Today, Senate Finance Committee Ranking Member Orrin Hatch (R-UT) and Ways and Means Committee Chairman Dave Camp (R-MI) sent a letter to heads of the Business Roundtable and the National Federation of Independent Business (NFIB) responding to the President  Obama’s call for a corporate tax reform only approach to tax reform as a means of averting the fiscal cliff.  In the letter, the two reaffirmed their support for comprehensive tax reform and noted that, “Reforming some portions of the tax code but ignoring others will not only leave the code entangled with provisions that restrict businesses, but it will leave out a huge sector of job creators, threatening to further hamper our economic recovery.”

Below is the full text of the letter:

December 14, 2012
 
James McNerney, Jr., Chairman
Business Roundtable
300 New Jersey Avenue, NW, Suite 800
Washington D.C. 20001
 
Dan Danner, President
National Federation of Independent Business
53 Century Blvd, Suite 250
Nashville, TN 37214
 
Gentlemen:
 
We are writing to express our concern about recent comments from members of the business community regarding tax reform and the ongoing negotiations over the so-called “fiscal cliff.”  
 
As you are aware, 10 months ago the White House proposed a rough outline of how to overhaul the tax code for corporations without reforming it for individuals and small businesses.  Some now report that the Administration is seeking a corporate-only tax reform approach as part of the fiscal cliff negotiations, and certain members of the business community appear eager to support such an exercise.  We believe, however, that pursuing corporate tax reform as a separate measure while addressing the deficit through tax increases on small businesses would hinder comprehensive tax reform efforts and do serious harm to small businesses throughout the country.  
 
Many small businesses — including partnerships, LLC’s, and S corporations — are taxed under the individual tax rate structure, with income from these entities flowing through to the individual owners’ tax returns.  As a result, these businesses will face significant tax hikes under a central component of President Obama’s proposal: raising the top two individual marginal tax rates.   According to the Joint Committee on Taxation, 53 percent of all flow-through business income would be subject to higher tax rates under the President’s proposal.  These employers – often the businesses we find along the Main Streets of our hometowns – need and deserve tax reform as much as any large corporation.
 
Make no mistake, we believe that it is vital that we reduce the corporate tax rate and reform our international tax rules to encourage economic growth, improve our nation’s competitiveness, and, most importantly, to create jobs.  However, such growth and job creation will not come from corporate tax reform alone.  Reforming some portions of the tax code but ignoring others will not only leave the code entangled with provisions that restrict businesses, but it will leave out a huge sector of job creators, threatening to further hamper our economic recovery.  
 
Furthermore, the practical reality is that there simply is not enough money on the individual side of the tax code to achieve the size of tax increases the President is seeking.  In endorsing the President’s push for higher tax rates, you are also risking some of your own top priorities for tax reform – such as shifting from a worldwide to a territorial system and bringing our corporate rate in line with the OECD average.

The President’s latest gambit is clearly meant to divide the business community on the issue of tax reform.  As Chairman of the House Ways and Means Committee and Ranking Member of the Senate Finance Committee, we urge business groups and the companies they represent to remain united in their support for comprehensive tax reform that benefits, not only large companies and corporations, but small businesses as well.  
 
Thank you for your attention regarding this important matter.
 
Sincerely,
 
HATCH
CAMP

cc:
A.O Smith Corporation
ABB Inc.
Abbott Laboratories
ACE Group
ADP
AES Corporation
Aetna
AGCO
AK Steel Corporation
Alcoa
Altec, Inc.
American Express
Amerigroup
Ameriprise Financial
Apache Corporation
Arch Coal, Inc.
AT&T
Avery Dennison Corporation
Avis Budget Group
Ball Corporation
Bank of America
Bausch & Lomb Incorporated
Bayer AG
Bechtel Group, Inc.
BlackRock
BNSF Railway
Boeing
BorgWarner Inc.
Brinks Company
C. V. Starr & Co., Inc.
Caesars Entertainment
Campbell Soup Company
Cardinal Health
Caterpillar
CBRE, Inc.
CF Industries Holdings, Inc.
CH2M Hill Companies, Ltd.
Chesapeake Energy Corporation
Cigna Corporation
Citigroup
Cognizant
Comcast
Convergys Corporation
Corning Incorporated
Crane Co.
CSC
CSX
Cummins Inc.
CVS Caremark
Darden
DaVita HealthCare Partners Inc
Deere
Dell
DIRECTV, Inc.
Dow Chemical
Duke Energy Corporation
DuPont
Eastman Chemical Company
Eaton Corporation PLC
Eli Lilly and Company
EMC Corporation Exelis
Express Scripts
Exxon Mobil
FedEx
Fifth & Pacific Companies, Inc.
First Solar
Fluor Corporation
FMC Corporation
Freeport-McMoRan Copper & Gold
Frontier Communications Corporation
Gannett
General Electric
Goldman Sachs Group
Grant Thornton LLP
Harman International Industries, Inc.
Harris Corporation
Hasbro, Inc.
Hertz Global Holdings, Inc.
Honeywell International
Humana
Ingersoll Rand
International Franchise Association
International Paper
ITC Holdings Corp.
ITT Corporation
J.P. Morgan Chase & Co.
Johnson & Johnson
Johnson Controls
Kelly Services, Inc.
Kindred Healthcare
KPMG
Liberty Mutual Insurance Group
Marathon Oil
MassMutual Financial Group
MasterCard
McDermott International, Inc.
McKesson
Medtronic, Inc.
Merck
Meredith Corporation
Meritor, Inc.
NASDAQ OMX
National Association of Manufacturers
National Association of Wholesaler-Distributors
National Gypsum Company
Navistar
NextEra Energy, Inc.
Norfolk Southern Corp.
Northrop Grumman
Nucor Corporation
Owens Corning
PepsiCo
Pfizer
PG&E Corp.
Phillips 66
Praxair Inc.
PricewaterhouseCoopers International Limited
Principal Financial Group
Procter & Gamble
Qualcomm Incorporated
R R Donnelley
RATE Coalition
Realogy Holdings Corp
Rockwell Automation
Rockwell Collins
Ryder System, Inc.
S-Corp Coalition
Sanofi
SAP AG
SAS
Sealed Air Corporation
Siemens Corporation
Stanley Black & Decker Inc.
State Farm Insurance Cos.
Suffolk Construction Company
SunGard
Target
Tenet Healthcare Corporation
Tenneco Inc.
Textron Inc.
The Hartford
The McGraw-Hill Companies
The Travelers Companies
The Williams Companies
Time Warner
Tishman Speyer
TransCanada Corporation
Tyco
United Technologies
Universal Health Services, Inc.
U.S. Chamber of Commerce
Verizon Communications
Viacom Inc.
Visa Inc
W.W. Granger, Inc.
Wal-Mart Stores
WellPoint
WESCO International, Inc.
Weyerhaeuser Company
Whirlpool Corporation
Windstream Corporation
World Fuel Services Corporation
Wyndham Worldwide Corporation
Xerox Corporation

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