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THE BRITISH AMERICAN BUSINESS COUNCIL IS COMMITTED TO PROMOTING TRANSATLANTIC TRADE AND INVESTMENT BETWEEN THE US AND THE UK


White House, says Rob Whittall, managing partner of Ohio-based accountant Dyke Yaxley. With only weeks left before the American


Tax policy key to election T


he state of the US economy and who is most likely to revive it could be vital to who gets the keys to the


voter goes to the polls, economic growth is an issue that both President Obama and Mitt Romney have to address on a daily basis. Although both focus on the short comings of each other’s policies when canvassing, you have to dig a little deeper to understand what they each propose to bring to the table if they are in the White House come January 2013. Their respective tax policies focus on


stimulating economic growth. Both Obama and Romney agree that the US tax system needs a complete overall as it is too complicated. Under current legislation, the highest federal


corporation tax rate is 35 per cent – the only country where it is higher is Japan. Both candidates realise that this is a huge global competitive issue. Romney says that he will introduce a federal


corporation tax rate of 25 per cent. He says: “Other countries have recognized the direct correlation between a lowered corporate tax rate and an increased competitive advantage.” Obama is keen to reduce the corporate tax


rate to 28 per cent, which he says would put “the United States in line with major competitor countries encouraging greater investment in America”. Linked to this is the question of how the US


Government should tax the foreign profits of US companies doing global business. Due to the high corporate tax rate, US global companies try to keep their profits offshore as


16 CHAMBERLINK OCTOBER 2012


long as possible. Both candidates are proposing tax policies to encourage these companies to repatriate these profits, so there is an influx of cash into the US economy. Romney is proposing that US company’s


foreign profits would be taxed on a “territorial” versus “worldwide” taxation system, i.e., US companies would only pay US tax on US generated profits. The hope being that foreign profits/cash parked offshore would be repatriated to the US and help kick start the economy. Obama believes that a pure “territorial”


system could aggravate the problem. For example, US companies may move more


Event to analyse the outcome


Will it be Obama or Romney for the White House? Whoever wins, BABC Midlands will be hosting a special post-US election breakfast on 7 November to discuss the outcome and what it will mean for the rest of the world. The event will be hosted by Squire Sanders and will take place at Rutland House,


148 Edmund Street, from 8am. The discussion will be led by Professor Scott Lucas (pictured), of the University of Birmingham. Prof Lucas has been professor of American Studies at the university since


1997, and is an expert in US and British foreign policy, as well as international affairs in Iran and the Middle East. A frequent contributor to American, British, and international media, Professor Lucas is the founder and editor of EA WorldView, one of the leading news and analysis sites on US foreign policy and international affairs.


To reserve your place, contact Reena Kenth on 0121 450 4217 or email r.kenth@birmingham-chamber.com


‘Both Obama and Romney agree that the US tax system needs a complete overall as it is too complicated’


business and jobs offshore, as their foreign profits would then never be subject to US taxation. Obama says US companies with foreign operations should pay a minimum rate of tax on their overseas profits and claims that “this would stop our tax system from generously rewarding companies for moving profits offshore.” Although Romney and Obama differ on the specifics of their corporate tax policies, they agree that the US corporate tax rates have to be reduced for the US to become a competitive marketplace to do business in. No doubt come January 2013, one of the two candidates will try to put their corporate tax policies into practice.


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