July 28, 2017

Treasury Secretary Steven Mnuchin

Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220

Dear Secretary Mnuchin,

The American Council for Capital Formation welcomes President Trumps Executive Order 13789
directing the Treasury Department to review several Internal Revenue Service regulations issued
by the Obama Administration. We would like to take this opportunity to provide our comments
as the Department commences its review, specifically in regards to the Section 385 debt/equity
regulations that were issued last October. When introduced in April of 2016, Section 385 was
designed to curb inversions, yet it drew immediate opposition from broad sectors of the business
community with its complexity, compliance burden and the wide net cast that would ensnare
companies which had no intention nor any desire to relocate overseas. And while Treasury officials
attempted to address these concerns in the final regulation, they fell far short.

As we warned earlier in a jointly signed letter with twenty-three other business groups including
the Business Roundtable, if the regulations are left on the books and enter into full effect, they
will increase the complexity of doing business in the United States and we believe they will
frustrate this administrations goals of improving the U.S. business climate, enhancing Americas
global competitiveness, and driving economic growth and job creationfor all multinational
businesses operating in the United States. Because of the negative impact of these regulations on
businesses in the United States, we urge Treasury to act quickly to ease the burden of the Sec. 385
regulations.

We are confident that after your review, you and your staff will reach the same conclusion.
Piecemeal regulations are not the solution to what ails our tax code and at the end of the day, will
do little to stop companies from moving overseas. However, permanent, comprehensive tax
reform that lowers the United States high corporate tax rate, moves us from a worldwide tax
system to a territorial one and implements full and immediate expensing for capital investments
will incentivize companies to stay in the United States. We would urge the Trump Administration
to work with both parties in Congress to prioritize legislation that brings our tax code into
alignment with our global competitors. I have attached a number of my writings on this issue as
well as by my colleagues at ACCF. I look forward to the results of your Departments reviews,
and would like to thank you for the opportunity to comment on the matter.

Sincerely,

Dr. Pinar Cebi Wilber, American Center for Capital Formation Chief Economist

Enclosures: ACCF Commentary on Treasurys Section 385 Regulations

1001 Connecticut Ave, Suite 620, Washington, DC 20036

202.293.5811 | www.accf.org


Cash pool issues still abound under Treasurys final debt-equity tax regs
Kat Lucero | October 14, 2016

Multinational companies are still subject to burdensome cash pooling requirements under significant
changes in international tax rules that aim to tackle a tax avoidance practice called earnings stripping, tax
experts told The Hill Extra.

The regulations turned the debt-equity world on its head in an attempt to address a perceived inversion
problem, Linda E. Carlisle, a member at Miller & Chevalier, said referring to the Treasury Departments
long-awaited final changes to proposed regulations under the tax code section 385.

The Treasury Department released late Oct. 13 the modified rules, exempting a broad range of areas,
including cash pooling and short-term loans, as well as certain transactions involving foreign subsidiaries,
S corporations, and regulated financial and insurance companies. They also exclude transactions between
mutual funds and real estate investment trusts.

During a press briefing before the final rules were made public, a department official said these areas
posed a low risk of earnings-stripping activity. The new regulations also provided relief for intercompany
loan documentation for U.S. borrowers by extending the deadline to Jan. 1, 2018.

Treasury first proposed the rules in April, targeting certain intercompany debt-to-equity transactions to
discourage business deals that could erode the U.S. tax base. Such deals include inversions, in which U.S.
businesses move their tax base to countries with low tax rates.

Fixes fall short.

While the modifications are major improvements to the proposed version, problems still abound, experts
said after taking their first sweep over the 500-plus page document. For many large businesses, the
underlying issue still remains: a new way of treating debt in certain financial transactions within a
company.

Is it an earnings-stripping rule, which means I am concerned about the debt-equity ratio in a corporation,
or is it a rule that re-characterizes what under 50 years of case law has been [applied to] debt to equity just
because of the way it is being used? Carlisle said. Its a very different approach.

L.P. "Chip" Harter of PricewaterhouseCoopers Washington National Tax Practice said foreign-based
companies with U.S. operations will likely challenge Treasury and the IRS over the section 385
regulations, but the number is now limited. These foreign businesses have been advocating for Treasury
to scrap the rules because they would face the short end of the debt reclassification changes, he said.

For them, the regulations have been substantially improved, but the regulations will still make it more
difficult to leverage up foreign-owned U.S. subsidiaries and get additional interest deductions in the
United States, Harter said. Narrowing the regulations to apply only to debt issued by U.S. corporations
is consistent with the stated objective of limiting U.S. base erosion.

Trouble for financial firms.

Treasury also didn't exempt total loss-absorbing capacity (TLAC), which could be a problem for financial
companies since the rules may conflict with Federal Reserve requirements under the Dodd-Frank law,
according to one tax counsel closely monitoring section 385s impact on the financial industry. The
source requested to remain anonymous because of the review of the rules is still ongoing.

Even though Treasury narrowed the focus of the section 385 rules, it didn't change what some experts
called the controversial 72-month per se period. This rule would require any debt instrument issued
within 36 months before or after the implementation of certain transactions to recharacterize to the extent
of the amount of that transaction, according to KPMGs initial reactions, listing distribution to
shareholders and acquiring stock of another group as examples of the deals.

If a company is making a distribution like a dividend and it follows with a debt arrangement it still
could be characterized as equity rather than debt, said Pinar Cebi Wilber, a senior economist at the
American Council for Capital Formation. Wilber said 72 months is a lifetime in this environment.
Everything changes so quickly, so they have to be very vigilant with the documentation.

U.S. multinationals get a pass.

As for U.S.-based multinationals, Treasury gave them almost a complete pass with respect to the
recharacterization and documentation rules, said Harter, adding that the number of taxpayers who care
passionately about these regulations has therefore been dramatically reduced.

The Financial Accountability and Corporate Transparency (FACT) Coalition praised Treasurys changes.

Treasurys effort to address the problem of earnings stripping will move us closer to a fair tax system
that addresses the challenges of a global economy, said Clark Gascoigne, the deputy director of the
FACT Coalition. Tax avoidance by multinational companies is estimated to cost the American public up
to $134 billion per year. This hundred-billion-dollar subsidy favors the largest, richest corporations in the
world at the expense of domestic American businesses and individual taxpayers.

While we are still pouring over the full details of the rule, its estimated to close about $600 million in
loopholes per yearmoving us $600 million in the right direction, Gascoigne continued. However,
Congress will ultimately need to act to holistically tackle the problem of inversions and close the

outrageous loophole, known as deferral, which currently allows multinational businesses to avoid
hundreds of billions of dollars in taxes.

Shortly after Treasury introduced the rules in April, a pending international deal between two major
pharmaceutical companies, Pfizer Inc. in New York and Allergan in Dublin, Ireland, ended. The
department, however, still drew a resounding chorus of opposition from Congress and the business
community for the broad application. They also criticized Treasury Secretary Jacob Lew for his intent to
swiftly finalize the controversial rules.

Still reading.

Ecolab has been digesting the regulations for six months, said Judy McNamara, vice president of tax for
the St. Paul-based multinational manufacturing company, in September.

It has been a joint effort with the tax, treasury and legal teams to design the process and the
documentation, said McNamara, insisting that Ecolab doesn't plan to move its tax base abroad.

The proposed regs "may lead us to leave cash overseas ... that we'd rather have cash back in the U.S.,"
said McNamara. "We'd rather have the cash back to invest in our [research and development] activities."

Tucker Shumack of Ogilvy Government Relations said the move reminded him of a quote from musician
Ronnie Van Zandt of Lynyrd Skynyrd: "[They] killed all the ducks in order to kill two or three.

With the final regs, they are letting a couple of geese who got caught up in the ducks flock go which is a
good thing, but theyre still killing all the ducks, said Shumack.

U.S. Adjusts Rules Limiting Corporate Earnings Stripping

Lynnley Browning | October 13, 2016

The U.S. Treasury Department softened new rules aimed at preventing multinational companies from
shifting their profits offshore to lower-tax countries -- a response to sustained criticism from big business
and from members of Congress, whod asked that they be delayed and scaled back.

The rules, first proposed in April, aim to restrict lending among subsidiaries of the same corporate parent,
which can create income streams in low-tax countries and tax-deductible interest payments in the U.S.
But tax lawyers who represent corporate clients complained that the proposed language went too far,
banning common cash-management practices that arent aimed at tax avoidance.

In issuing final regulatory language Thursday, Treasury officials exempted from the new rules cash
pooling, a common practice under which companies sweep daily excess cash from various subsidiaries
into a single account. They also included limited exemptions for specific cases -- including for regulated
financial and insurance companies, which are already restricted in their ability to issue debt among
subsidiaries -- and delayed requirements for companies to document their related-party lending until Jan.
1, 2018.

Even with the softeners, the rules drew concern from Representative Kevin Brady, the chairman of the
House Ways and Means Committee, who said President Barack Obamas administration was moving too
quickly to adopt them.

By rushing the review process -- despite the extensive comments received -- and finalizing these
regulations so quickly, it appears that the Obama administration has ignored the real concerns of people
who will be most impacted by these far-reaching rules, said Brady, a Texas Republican. He said he will
study the regulations carefully and seek public comment on them.

Senator Orrin Hatch, the Utah Republican who chairs the Senate Finance Committee, called it
immensely concerning that the administration released final rules.

There were a lot of positive steps and responsiveness to industry concerns, said Michael Shulman, a tax
lawyer at Shearman & Sterling LLP. In terms of big picture, there are clearly some big exceptions that
will be welcome. Shulman stressed that he was basing his remarks on a one-page summary of the
changes -- not the hundreds of pages that will lay out the final rules.

Earnings Stripping

The regulations are in general aimed at a practice that tax officials call earnings stripping, by which
companies shift their profit to low-tax jurisdictions. The strategy is frequently used by corporations that

have moved their tax addresses offshore via so-called inversions. In an inversion, a U.S. company merges
with a foreign firm then shifts its tax address overseas. More than 20 companies have undertaken
inversions since 2012 -- and while the maneuver has become an issue in the 2016 presidential race,
Congress has taken no action.

Treasury officials say the new rules are intended to apply to intra-company loans that dont result in net
new investments in the U.S. By limiting earnings stripping, the regulations are expected to save as much
as $600 million to $700 million a year in tax revenue, a senior Treasury official said.

This administration has long called for legislative action to fix our broken tax system, Treasury
Secretary Jacob J. Lew said in a news release. In the absence of Congressional action, it is Treasurys
responsibility to use our authority to protect the tax base from continued erosion.

The new rule will make it harder for large foreign multinational companies to avoid paying U.S. taxes,
and reduce the incentives for U.S. companies to shift income and operations overseas, Lew said. Such
tax avoidance practices are wrong and should be stopped.

The U.S. Chamber of Commerce criticized Treasurys approach in an e-mailed statement: While it
appears that Treasury may have attempted to address at least some of the Chambers concerns, we
continue to believe punitive, one-off changes to the tax law do nothing to address the root of the
purported inversion problem: our antiquated and anticompetitive tax code.

And the American Council for Capital Formation, a pro-business policy group, called the regulations
deeply concerning.

These hastily created regulations will increase the costs of doing business for potentially thousands of
American companies and will penalize companies that have no intention of inverting, the group said in
an e-mailed statement. Its now up to Congress to pursue a legislative remedy that will address those
issues, the group said.

The rules give Treasury officials and the Internal Revenue Service the authority to treat certain debt
transactions among related parties as equity deals -- a status that would remove tax benefits associated
with loans.

Profound Impact

Almost immediately after they were announced, the rules drew opposition from tax lawyers. As proposed,
the rule could have had a profound impact on a range of modern treasury-management techniques,
according to a research note that the Big Four accounting firm PriceWaterhouseCoopers wrote in April.

Lawyers and trade groups sent Treasury officials more than 80 letters commenting on the regulations. The
American Bar Association penned a 177-page letter.

In response to the criticisms, Treasury officials created the following exemptions:

Cash pools and short-term loans. Companies use cash pooling to manage cash among their
affiliates on a daily basis. Its not clear how the regulations will define short-term.
Loan transactions among only foreign subsidiaries of U.S. companies. Officials determined that
foreign-to-foreign transactions have limited U.S. tax consequences.
Transactions among subsidiaries organized as S corporations. In that organizational structure, the
subsidiaries pass their income to their owners.
Transactions among regulated financial companies and among regulated insurance companies.
These firms are already subject to regulations that restrict their ability to issue intracompany debt
or to issue instruments inappropriately characterized as debt, according to a Treasury fact sheet
about the rules.
Certain transactions between mutual funds that are regulated investment companies and real
estate investment trusts.

Andrew Eisenberg, an international tax lawyer at Jones Day, said it was obvious that officials had gotten
rid of a lot of the problematic parts of the rules. But he added that he was still troubled by the rules
broad treatment of debt as equity. Interest on debt is deductible, while equity is taxable.

And Shulman, of Shearman & Sterling, said hes eager to see how Treasury will define short-term
lending. The devils in the details, he said.

Apple and Microsoft might be new poster children for tax reform
Pinar Cebi Wilber | September 20, 2016

This month's big news for tech addicts was the unveiling of the next generation iPhone 7. Apple hopes
that, like earlier updates, this will be another success for its bottom line. However, no new success comes
without a headache. For Apple, that may mean more money stashed overseas and the increased risk of
facing the backlash of various tax authorities.

Several news stories this summer demonstrate what many of us already know to be true: Our outdated tax
code is keeping much-needed investment money overseas instead of here in the United States.

First, just recently, the European Commission's Competition Commissioner Margrethe Vestager levied a
record tax bill on Apple. The commission accused Apple of owing up to 17 billion euros in reportedly
illegal back taxes for revenue parked in Ireland. Ireland has Europe's lowest corporate tax rate at 12.5
percent, in contrast with America's 39 percent combined corporate tax rate.

Second, in a wide-ranging interview with The Washington Post last month, Apple CEO Tim Cook
defended the company's tax strategy, including the decision to keep money overseas. Apple is, of course,
not alone in leaving money in more tax-friendly jurisdictions.

Third, software giant Microsoft made news in June when it agreed to purchase LinkedIn for $26.2 billion.
The rub: Microsoft borrowed the money to complete the deal even though it has roughly $100 billion
sitting outside the country, beyond the tax collector's reach.

Before the chorus condemning both technology giants grows any louder, it's worth examining why they
made their respective decisions.

It's true that Microsoft has more than enough cash to buy LinkedIn. But bringing back that money from
overseas would trigger a hefty tax levy of 39 percent. Not only is that the highest combined corporate tax
rate in the developed world, but the United States is also one of only six countries in the Organization for
Economic Cooperation and Development (OECD) to tax corporate income earned overseas when it is
repatriated.

The standard among our major competitors is to tax earnings only in the country in which they were
earned the so-called "territorial system." Twenty-eight of 34 OECD countries have some form of
territorial taxation.

That is reason enough for Microsoft to keep its foreign earnings overseas. Also factoring into its decision
is the added tax benefit of borrowing in the form of interest deductions. This not only decreases the
company's current year tax bill, but also future taxes for as long as Microsoft pays interest on the loan.

When these two factors are combined, it becomes clear that Microsoft and Apple made rational decisions.
They chose a path that maximizes profits and benefits shareholders exactly what a corporation is
supposed to do.

That is not to say that there isn't a lesson to be learned here about taxes. What might be best for a business
is not always best for American tax revenues. Our country's antiquated tax code prevents companies such
as Microsoft and Apple from bringing home their overseas earnings and reinvesting here, which could
boost tax revenues and create jobs in the long run.

Worse, the U.S. Treasury Department has proposed far-reaching new regulations under Section 385 of the
Internal Revenue Code that would reclassify inter-company debt as equity, tax such transactions under the
U.S. corporate tax rate and thereby penalize U.S. companies for daily business transactions. This
development threatens to discourage much-needed foreign investment into the United States.

Given the drawbacks of our current system and renewed scrutiny American companies face overseas, the
sensible move would be to reform the U.S. tax code to allow businesses to bring money home, spur
investment and keep American companies in America. But such reforms seem unlikely in the current
political climate. What is preventing the federal government from taking this crucial step?

There is broad bipartisan agreement that the tax code needs to be changed. President Obama's annual
budget has long recognized the problem and Congress has released multiple tax reform proposals that
address either the full tax code or portions of it.

Unfortunately, the holdup is in the business community, which disagrees over the best path for reform.
High-capital businesses value certain provisions like the Section 199 deduction in the tax code
more than less capital-intensive businesses. And they have a valid case as there has been a significant
shift in the U.S. economy from manufacturing to the service sector. For these businesses, reducing the
corporate tax rate is preferred, even if it means cutting other tax provisions to finance lower overall rates.

In light of these competing business interests, it is important to strike the right balance for tax reform.
And while we're still some ways off from finding that balance, one thing is already certain: We should be
attacking the antiquated tax code rather than companies like Microsoft and Apple who are doing their best
to deal the hand they've been dealt.

Wilber, Ph.D. is a senior economist at the American Council for Capital Formation, a nonprofit,
nonpartisan organization advocating tax, energy and regulatory policies that facilitate saving and
investment, economic growth and job creation.

Candidates Should Stump on Capital Formation

Pinar Cebi Wilber | August 5, 2016

This year's election cycle has been unpredictable, to say the least. Time and time again, the Washington
punditry has been trumped (no pun intended) by the latest pivot away from campaign orthodoxy. While
political calculations have proven as dicey as a Vegas roulette table, it's a safe bet the economy will be
front and center on voters' mind come November.

Last week, the U.S. Department of Commerce reported that second-quarter growth came in well below
expectations. At an anemic 1.2 percent, the economy grew at less than half of what experts forecasted.
Federal officials also downgraded initial first-quarter growth to 0.8 percent. The numbers indicate that
economic growth over 2016 is likely to tumble below 2 percent, a decline from 2.6 percent last year
which was even below the sluggish pace of previous years.

A study earlier this year by the American Council for Capital Formation (ACCF) (where I am senior
economist), "Capital Formation 101," provides further color to the troublesome economic outlook painted
by the spate of federal performance reports. In addition to poor economic growth, U.S. investment is
consistently weak and labor productivity trends are pointing down. Gross fixed capital formation, a key
indicator of businesses' and individuals' planning toward future growth, lags behind that of the United
States' top 10 trading partners, except the United Kingdom.

Capital formation is expenditure to preserve and increase the stock of our nation's wealth. That means
investment in equipment, inventories, plants and other resources necessary for businesses growth. For
individuals, it is savings and long-term planning. Federal tax, spending and regulatory policies affect how
business and individuals alike allocate investment, and therefore the prospects for growth.

During a recent roundtable discussion hosted by the ACCF, Harvard University Professor Dale Jorgenson
explained: "Capital formation is the key driver of productivity growth. Productivity growth contributes to
a very substantial part of our growth in the standard of living." Simply put, investment in the factors that
provide the groundwork for companies to take on new projects and innovate are vital to achieving long-
term improvement in the standard of living for everyday individuals.

Sadly, over the past decade, misguided policy has failed to properly incentivize capital formation. Tax
and regulatory systems have become burdensome, discouraging businesses from investing. The United
States claims the highest statutory federal corporate tax rate among developed countries: 35 percent. We
also have the fifth-highest effective marginal tax rate among Organization for Economic Cooperation and

Development (OECD) countries. And while America's competitors have tackled tax reform in varying
degrees to keep up with shifting economic realities, the U.S. tax code has grown more and more complex
over the past 30 years.

As a result, the United States has experienced a dramatic spike in corporate inversions in recent years
the maneuver in which U.S. businesses merge with foreign companies to take advantage of the friendly
tax environments of those countries. Congressional research indicates inversions could cost America as
much as $40 billion in lost revenue over the next 10 years.

The U.S. Treasury Department recently issued another set of regulations intended to curb the practice.
Some of these proposed regulations under Section 385 of the Internal Revenue Code go way beyond any
objectives to curtail inversions, and in fact raise high compliance costs on the broader American business
community, as my colleague, ACCF President Mark Bloomfield, has pointed out.

Such patchwork solutions fail to address the underlying issue: a complex and burdensome tax code.
Government agencies will never be able to pen in American businesses, and the patchwork regulation
meant to do so only adds more layers of bureaucracy for honest businesses. That is felt most acutely by
small businesses, which lack the resources of larger competitors to stay in compliance with the thicket of
rules and requirements.

Instead, we as voters must demand Washington address comprehensive tax reform. Serious reform must
lower rates for businesses and individuals; uniformly eliminate loopholes and special interest breaks;
simplify the code so it's easily navigable for average business owners and families; and remain revenue
neutral by refusing to single out certain industries. By achieving those goals, lawmakers will ensure the
tax structure serves a very specific purpose: to raise public revenue in a growth-oriented manner.

Fortunately, leaders on Capitol Hill have indicated they are willing to begin this important work. House
Speaker Paul Ryan (R-Wis.) and House Ways and Means Committee Chairman Kevin Brady (R-Texas)
recently announced a blueprint for reform that would address many of the barriers to capital investment.
The plan is a good start, and lawmakers from both sides of the aisle must put aside political ideology to
ensure its success. Comprehensive reform will require both parties to make concessions, but investment
and growth must remain priorities.

By the same token, voters should demand both Democratic nominee Hillary Clinton and GOP nominee
Donald Trump address tax reform. Both have talked in generalities, but the American public deserves a
commitment so that this important obligation is no longer ignored. By creating a tax system that is
conducive to growth, Washington will help U.S. businesses and families focus once again on investing
for the future, which will once again spur the kind of growth our economy needs.

Wilber, Ph.D., is a senior economist at the American Council for Capital Formation, a nonprofit,
nonpartisan organization advocating tax, energy and regulatory policies that facilitate saving and
investment, economic growth and job creation.

What Will Really Fix Americas Unfair Tax System

Mark Bloomfield | May 30, 2016

Nothing galvanizes bipartisan opposition quite like flawed tax policies, as the Obama Administration
recently learned when 18 former high ranking U.S. Treasury officials of past administrations from both
parties publicly rebuked Treasury Secretary Jack Lew for Treasurys latest proposal to discourage
corporate inversions. Their assessment was succinct: the Treasurys fix' will likely make matters worse.
Instead, they urged Lew to focus on addressing the competitive disadvantages that are harming capital
investment, employment, and economic growth in the United States. In other words, lets get serious
about reforming Americas tax code.

Inversions, where U.S.-based corporations relocate their official headquarters to another country with a
more favorable tax rate, should be discouraged. But its a mistake to view the phenomenon, as Obama
administration officials do, through the singular lens of recovering millions of dollars in lost tax revenue.
Instead, they should recognize corporate inversions as the manifest result of an American tax structure
thats inhospitable to business. Or, as former Treasury officials, including ex-Secretary George Shultz
smartly put it, Inversions are a symptom. The disease is Americas anomalous international tax code.

Just as you would expect your physician to treat a bad lung infection with more than merely proscribing
lozenges for the coughing, the U.S. should demand that government address the fundamental flaws of the
nations tax system thats driving away jobs, investment, and yes, tax revenue. The Joint Committee on
Taxation puts lost tax revenue at close to $20 billion over a decade from inversions.

While the new rules are temporary, pending a public comment period on July 7, they nonetheless do
nothing to fix the systemic flaws within the U.S. corporate tax structure. Nor do they discourage the
practice of corporate inversion. They dont lower the rate. They dont institute fairness by adopting a
territorial system. They do nothing to indicate the U.S. wants to host more enterprise. They dont make
America a more hospitable, business-welcoming environment, which means, in the end, neither will they
lead to more tax revenue.

Some of these new rules are so far-reaching that they seek even to change the very definition of the basic
business accounting concepts of equity and liability. Its why the Wall Street Journal has reported
that corporate tax lawyers whove delved deeply into the new rules say they cast aside decades of
precedents and force corporations to alter routine cash-management techniques. The new regulations that
could wrap in collection of tax liabilities on cash management, in part derived from the 47-year-old
Section 385 of the tax code, would have a chilling effect on American enterprise.

U.S. businesses are already burdened with the highest corporate tax rates in the developed world, with an
overall federal corporate tax rate of 39%. We are at the top of the pile which is to say, we are the least
business-friendly of all 34 members of the OECD, the organization of the largest developed world
economies. In contrast, the average tax rate of an OECD country is 25%. South Korea offers 24%, while
the U.K. sets theirs at 20%. The U.S. is not only disadvantaged based on its high statutory corporate tax
rate but it has also the 5th highest effective marginal tax rate among OECD and BRIC countries,
according to research and data prepared by Katarzyna Bilicka and Michael Deveraux of Oxford
University.

America is also nearly alone among OECD countries for its worldwide tax system. Whereas most
countries 28 of the 34 OECD member nations operate under a territorial system that assesses taxes
only in the countries in which profits are earned, American-based companies that do business abroad are
also on the hook for corporate taxes at home.

Combined, these two tax policies put U.S. companies at a huge disadvantage to their foreign counterparts,
according to tax experts at the Tax Foundations International Tax Competitiveness Index. Its also partly
why the U.S. ranks 32nd out of 34 OECD countries in terms of tax competitiveness, ahead of only France
and Italy.

Thankfully, some elected leaders including U.S. House Speaker Paul Ryan, Senate Finance Committee
Senior Democrat Ron Wyden, and House Ways and Means Committee Chairman Kevin Brady have
committed to tax reform in various capacities. A lower, fairer, uniformly applied rate will spur growth,
and encourage American investment right here at home. No better way to discourage corporate
inversions.

Mark Bloomfield is President and CEO of the American Council for Capital Formation, an economic
policy research organization that promotes economic growth and global competitiveness. He is also a co-
editor of the book, The Consumption Tax: A Better Alternative and was Secretary of President-Elect
Reagan Transition Task Force on Tax Policy from 1980 to 1981.