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A new coalition of major U.S. businesses Tuesday launched an effort to prod Congress to lower the corporate tax rate.
U.S.-based multinational companies including Boeing Co. (BA), AT&T Inc. (T), FedEx Corp. (FDX), United Parcel Service Inc. (UPS), Altria Group Inc. (MO), Verizon Communications Inc. (VZ) and Walt Disney Co. (DIS), organized under an umbrella group to lobby lawmakers to reduce the corporate tax rate from its current highest level of 35%.
"We believe the cornerstone of reform must be a significantly lower statutory corporate tax rate," the coalition, Reducing America's Taxes Equitably, wrote in a letter signed by the companies' chief executives and sent to President Barack Obama.
Unlike a congressional committee that may look at overhauling the tax system as part of its mandate to reduce the federal budget deficit by at least $1.2 trillion over 10 years, the coalition isn't aiming to overhaul the system to either raise revenue or keep the revenue level constant. Its priority is to first lower the corporate tax rate to make U.S. businesses more competitive. The companies' executives, however, said in the letter they would be willing to see beneficial tax breaks closed in the process of reducing the rate. The group didn't specify the level to which the rate should be lowered.
"Importantly, in our current deficit environment, we understand that many tax expenditures must be eliminated and/or reduced in order to achieve a meaningful corporate rate reduction," the letter stated.
The group is hoping that trade-off makes its cause more attractive to lawmakers on both sides of the aisle.
"The idea of eliminating loopholes to lower rates is in keeping with the conservative idea of a no-tax pledge," said Jim Pinkerton, the coalition's Republican co-chairman and a former White House staffer under presidents Ronald Reagan and George H.W. Bush.
Elaine Kamarck, the group's Democratic co-chairman and a former member of the Clinton White House staff, said the effort to secure lower rates could unify disparate companies.
"That really applies to everyone across the board," she said. A tax break for companies bringing home profits held overseas, by contrast, would benefit some industries more than others, Kamarck said.
The coalition plans to target the Joint Select Committee on Deficit Reduction, the bipartisan panel of 12 lawmakers whom both Obama and House Speaker John Boehner (R., Ohio) have urged to take on a major overhaul of the tax code, as well as the congressional tax-writing panels, the House Ways and Means and Senate Finance committees.
-By Kristina Peterson, Dow Jones Newswires; 347-882-7215; email@example.com