Nov. 16 (Bloomberg) -- Multinational companies including Microsoft Corp. and Oracle Corp. are urging Congress to make passing a measure to allow a tax break on their offshore profits a greater priority than a comprehensive tax-code overhaul.
The opportunity to boost the economy by encouraging repatriation of more than $1 trillion in earnings held by U.S. corporations overseas should, in the short run, trump the longer process of revamping the tax code, the WIN America Coalition said in a letter today to congressional leaders.
“While we support congressional efforts to enact comprehensive tax reform that makes our domestic tax code more efficient for U.S. companies to compete in the growing global market, we believe in the short term, Congress has an enormous opportunity to immediately inject significant private-sector investment into the U.S. economy,” said the letter, signed by Microsoft Chief Executive Officer Steve Ballmer, Oracle co- President Safra Catz, and the CEOs of 13 other companies.
The letter called on Congress to authorize the return of overseas income at “a more efficient tax rate than is currently available.”
The document didn’t specify a tax rate the companies were seeking. Several pieces of repatriation legislation propose allowing companies to return offshore profits at 5.25 percent, the same rate in effect during a so-called tax holiday on foreign income in 2004. The top corporate tax rate is currently 35 percent.
Tax Holiday Proposed
The WIN America coalition has been lobbying Congress for the tax holiday for months.
The Obama administration has said that a tax holiday should be considered in the context of a broader tax overhaul.
The congressional supercommittee is considering changes to the tax code as it considers fashioning the framework of debt- cutting plan by a Nov. 23 deadline. Failure to enact a debt- reduction plan this year would trigger $1.2 trillion in automatic spending cuts beginning in 2013.
--Editors: Jodi Schneider, Robin Meszoly
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