Associations Recommend Comprehensive Tax Reforms
In response to requests for comments issued by the United States Senate Committee on Finance, SIFMA and the United States Chamber of Commerce (the "Chamber") made recommendations advocating comprehensive tax reform that would affect both corporate and individual taxpayers.
SIFMA offered the following recommendations:
Federal Exemption for Municipal Bond Interest. Preserve this exemption in order to promote investments in infrastructure. Additionally, provide tax credits for private investors in infrastructure projects, and allow state and local governments to issue bonds on behalf of private borrowers for infrastructure-related projects.
International Tax Reform. Develop an exemption system that does not tax residents on income earned from conducting foreign business. Ensure that businesses are not dissuaded from repatriating foreign earnings into the American economy, and encourage American competition in foreign markets.
Tax Incentives for Retirement Savings. Preserve the tax-deferred status of retirement plans.
Capital Gains and Dividends. Reduce tax rates for capital gains and qualified dividends.
Financial Transaction Tax. Do not impose any form of financial transaction tax, since the imposition could "place the United States at a competitive disadvantage compared to other financial markets."
The Chamber stressed the need for lower taxes on capital gains and dividends. It cautioned against changing tax provisions in order to diminish or eliminate the current treatment of retirement plans, and argued that to do so would discourage Americans from saving. The Chamber suggested lower marginal corporate tax rates, as well as lower marginal rates for pass-through entities.
In addition, the Chamber called for the implementation of a territorial tax system for taxing foreign income. According to the Chamber, a territorial tax system would "allow American companies to build their global franchises while continuing to strengthen American operations."