by Semiconductor Industry Association
House Speaker Paul Ryan (R-Wisc.) and House Ways and Means Chairman Kevin Brady (R-Texas) on Friday unveiled a blueprint to reform America’s outdated tax system. SIA applauds the Speaker, Chairman Brady, Committee members, and staff for their hard work producing this plan to advance the cause of urgently needed U.S. corporate tax reform.
Corporate tax reform is needed to strengthen American companies’ global competitiveness and to drive economic growth and job creation in the United States. The tax policies of other countries present two tiers of competition for the U.S. semiconductor industry. The first tier is the competitive pressure we face along with other U.S. industries because many foreign countries have more attractive tax systems. Other countries currently provide lower corporate tax rates, more robust incentives for R&D, and territorial tax systems that don’t impose an additional layer of taxes on international profits.
A second tier of competitive pressures come from special incentives that are given selectively by governments to taxpayers that bring to the country strategic investments. Foreign governments offer incentives for locating wafer fabrication, R&D, and other components of the semiconductor value chain. These include full or partial “tax holidays” and other benefits such as loans and reduced utility costs. These substantial tax differences offer foreign companies a significant advantage in the global marketplace.
The tax reform blueprint includes several key SIA-supported reforms, including a significant reduction in the corporate rate, enacting a territorial system that incentivizes U.S. companies to invest foreign earnings in America, and preserving a more effective R&D tax credit.
SIA looks forward to providing detailed feedback to the Committee on this blueprint, and how to reform the tax code in a way that strengthens U.S. competitiveness and bolsters the global market leadership of the U.S. semiconductor industry. We look forward to continuing work with Congress and the Administration on this important issue.
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