The U.S. corporate tax system, largely shaped by the Tax Cuts and Jobs Act of 2017, provides a globally competitive tax rate which encourages companies to invest in America and benefits U.S. workers, families, and communities. Policymakers at all levels should maintain and build upon this successful tax system to encourage investment in American businesses at a critical time for the nation’s recovery from the COVID-19 economic crisis. As Congress considers future changes to the tax code, TechNet supports the following:
· Defending the legal right of U.S. corporations to structure global business operations consistent with relevant legal requirements.
· Rejecting international efforts to impose special taxes on digital businesses while encouraging governments to engage via the Organization for Economic Cooperation and Development’s inclusive framework to develop a comprehensive income tax-based and treaty-compliant solution that applies equally across the digitalized economy.
· The continued prohibition of federal internet access taxes.
· Promoting more stock ownership opportunities for workers at startups and other employers by allowing them to defer the tax associated with the exercise of their personal equity until they sell the underlying shares and thus have the cash to pay the tax, instead of taxing these options upon vesting.
· Policies that allow companies to manage balance sheets through share repurchases, which allow a return of excess cash to investors after making necessary investments in people, research, and development.
· The permanent exclusion of federal and state capital gains taxes on investments in startup businesses that are held for more than five years.
· Policies that promote startup businesses by not increasing taxes on entrepreneurial investment activities.
· The use of the tax code to spur private investment in research and development. TechNet’s principles on research and development can be found here.
· Simplified tax requirements for mobile workers.
· Ensuring that tax policies affecting the gig and sharing economy help promote economic opportunities, provide clarity, do not impose significant administrative burdens for job creators, and recognize the unique differences that exist among the business models of innovators operating in this growing segment of the economy.
· Access to existing tax credits and benefits for gig and sharing economy participants.
· Preserving the full and current income tax dedications for advertising expenses while not allowing for carve-outs that limit the current deduction for certain types of advertising.
· Enhancement and expansion of the Coronavirus Aid, Relief, and Economic Security (CARES) Act Employee Retention Tax Credit.