The Senate permanent subcommittee on investigations (PSI) has scheduled for Thursday, July 30, a hearing to consider the effects of the U.S. corporate tax code provisions on foreign acquisitions of U.S. businesses and the ability of U.S. businesses to expand by acquisition.
A list of witnesses scheduled to testify at the hearing consists of executives and chief financial officers of U.S. companies.
Tomorrow’s hearing is the latest in a series of hearings on the general topic of how tax laws influence business decisions made by multinational companies. This hearing, however, is the first such hearing conducted by new PSI chairman, Rob Portman (R-OH).
Portman not only replaced Senator Carl Levin (D-MI) as PSI chair in January, but also was co-chair of the Senate Finance Committee’s international tax reform working group.
The tone of tomorrow’s hearing is expected to be different than that of past hearings on the same general topic. In announcing the hearing, subcommittee chairman Portman said:
The United States has the highest corporate rate in the industrialized world, and our government taxes American businesses for the privilege of reinvesting their overseas profits here at home…. As a result, the hard reality is that U.S. businesses are often much more valuable in the hands of foreign acquirers who can reduce their tax bills…. [The] hearing … will shed light on how our broken tax code affects the battle for corporate control and American jobs. The hearing is the culmination of the Subcommittee’s review of several major deals that resulted in the loss of U.S. corporate headquarters. We will hear directly from both U.S. companies that have felt the immense tax-driven pressures to move offshore and foreign corporations whose tax advantages have turbocharged their growth by acquisition. Our goal is to better inform the debate about how to reform our tax code in a way that helps every enterprise doing business in America—both U.S.-based and foreign-headquartered—grow and create new jobs here.
This statement—as well as the content of the international tax reform working group report—suggests the likely objective of the hearing will be to solicit input from multinational companies on how the tax code can be changed to prevent further erosion of the U.S. tax base.
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