PACE Coalition Seeks to Preserve a Level Playing Field for U.S. Companies Competing Abroad

Proposed Changes in U.S. Taxes on Foreign Earnings Would Harm U.S. Jobs
WASHINGTON--(Business Wire)--
In response to the Administration`s announcement today that it would be seeking
to raise nearly $200 billion in new taxes on America`s most successful job
creators, America`s leading business associations announced the launch of a new
coalition formed to help preserve American competitiveness and American jobs.
The PACE Coalition - Promote America`s Competitive Edge - represents thousands
of U.S. employers that would be negatively impacted by proposed changes in U.S.
corporate tax provisions.

Representing the combined membership of Business Roundtable, the National
Association of Manufacturers, the National Foreign Trade Council and the U.S.
Chamber of Commerce, the PACE Coalition will advocate for preserving current
corporate tax laws governing foreign operations of U.S. companies. The current
system allows for a temporary "deferral" of U.S. taxes until those earnings have
been paid, typically as a cash dividend, to the parent company.

"This is a jobs and fairness issue," said John J. Castellani, President of
Business Roundtable. "The overseas operations of U.S. multinational companies
support jobs and higher living standards here at home. If the United States
moves unilaterally to raise the taxes on U.S. companies operating abroad, it
will put our employers at a big disadvantage with foreign competitors."

Castellani noted that the foreign operations of U.S. companies are still subject
to taxes in the country in which they operate, just as foreign companies
operating in the U.S. are subject to U.S. corporate taxes. The temporary tax
deferral provides for comparability between taxes on the foreign operations of
U.S.-based and foreign-based international companies. All OECD members and other
major developed countries that tax the worldwide earnings of their international
companies permit some form of deferral. If we move forward with these proposals,
the U.S. will be creating a less competitive tax system at a time when our major
trading partners are moving to more flexible systems.

"Leaving aside the questionable wisdom of raising any taxes in the midst of a
deep recession, this proposal is a job-killer for American workers," said John
Engler, President of the National Association of Manufacturers. "U.S. corporate
tax rates are already higher than most of the rest of the world. Deferral is
essential to the competitive operation of U.S.-owned companies in foreign
markets."

American multinational companies directly employ nearly 22 million U.S. workers,
support the jobs of 30 million more, and pay wages that are 24 percent higher
than average U.S. private-sector wages. Those 52 million American jobs - 44
percent of the U.S. workforce - depend, in part, on the competitiveness of
U.S.-owned foreign affiliates.

"This backdoor attempt to eliminate deferral would saddle the foreign operations
of U.S. companies with high taxes their competitors would not have to pay. The
results would be disastrous for employment in the United States," stated Bill
Reinsch, President of the National Foreign Trade Council. "We are grateful that
Senator Baucus, Chairman of the Senate Finance Committee, has acknowledged that
tax policies must be `fair and support the global competitiveness of U.S.
business.`"

Ninety-five percent of the world`s consumers live outside of the United States.
Reaching those consumers by operating directly in their home markets is the only
way for American multinational companies to expand their market share and grow
their businesses.

"Anything that hurts U.S. competitiveness in foreign markets hurts U.S. workers
here at home," concluded Thomas J. Donohue, President & CEO of the U.S. Chamber
of Commerce. "A huge tax hike on U.S. employers is not the way to stimulate our
economy. Congress should reject it and vote to keep American companies
competitive."

PACE Website Launched: "www.pace4jobs.org"

The PACE Coalition also announced the launch of its new website,
www.pace4jobs.org - which is being designed to serve as a one-stop source of
information on deferral and related corporate tax issues. The site includes
issue briefs, a deferral "primer," fact sheets, case studies, a glossary of
terms, up-to-date news and information, useful links, and other background
information.

The PACE Coalition is dedicated to promoting and increasing the more than 50
million American jobs that depend on the international competitiveness of
U.S.-based multinational companies. The ability of these companies to stem job
losses in the United States and eventually return to hiring more American
workers depends on the health and vitality of their worldwide operations. To
ensure American competitiveness, PACE advocates that the United States maintain
a level playing field for taxation of international operations, and not act
unilaterally to disadvantage U.S. companies.

Fratelli Group
Eric Thomas or Jennifer Cummings
202-822-9491

Copyright Business Wire 2009