From the Wall Street Journal:
U.S. multinationals pressed their case for exempting all foreign profits from U.S. tax at a Thursday House hearing, as a congressional debate over corporate taxes got off to a contentious start.
Procter & Gamble Co. Chief Executive Robert McDonald, testifying on behalf of the trade group Business Roundtable, put the foreign profits issue front and center before the House Ways and Means Committee. He argued that U.S. companies’ competitors based in Japan and the United Kingdom have systems that exempt most profits earned abroad.
“We’re not talking about a tax break. What we’re talking about is paying the same as our foreign-based competition,” McDonald said.
But Rep. Lloyd Doggett (D., Tex.) called the idea of switching to a territorial tax system, or one that exempts profits earned outside U.S. borders, “a sure-fire way to continue the export of more American jobs.”
McDonald also said companies have asked Treasury Secretary Tim Geithner to abandon the position of the administration of President Barack Obama that a corporate rate reduction shouldn’t result in less revenue overall for the government.
McDonald said business groups asked Geithner “to take that off the table for now.” He said lawmakers and the administration should instead focus on an overhaul that is “fiscally responsible,” but that would result in a net tax cut to corporations.