Release Date: July 18,
2017
Contact: Carol Danko,
202-962-7390, [email protected]
SIFMA
Submits Tax Reform Recommendations to Senate Finance Committee
Washington, DC, July 18, 2017 – SIFMA
submitted recommendations for tax reform to the Senate Finance
Committee in response to Chairman Orrin Hatch’s (R-UT) request for comments
issued on June 16, 2017.
"SIFMA strongly supports tax
legislation that will enhance economic opportunities for individual Americans,
promote savings and encourage investment, and lower the tax rate for American businesses
that compete in a global marketplace,” said Kenneth E. Bentsen, Jr., SIFMA
president and CEO. “SIFMA commends Chairman Hatch, his staff, and the
members of the Senate Finance Committee for making tax reform a priority. We look forward to working with the Committee
to improve the climate for economic growth and prosperity for all Americans,”
SIFMA’s recommendations include:
SIFMA
Supports Pro-Growth, Comprehensive Tax Reform:
SIFMA supports movement to a territorial
tax system that recognizes the unique characteristics of the financial services
industry, that is fair and equitable for U.S. financial services companies and
investors, and has tax rules for inbound investment that encourage foreign
investment in the U.S. and does not discriminate against non-U.S. financial
services companies seeking to compete in U.S. markets.
International
Tax Reform:
The U.S. is one of the only remaining
countries that continue to tax its residents on income derived from the active
conduct of a foreign business. Most of our trading partners have moved toward a
more competitive exemption or partial exemption system, under which business
income earned by foreign subsidiaries is taxed primarily in the country where
it is earned and anti-base erosion regimes serve to protect the home country
tax base. SIFMA believes that a well-crafted exemption system, with appropriate
safeguards against base erosion, would be strongly beneficial to the United
States economy.
Federal
Tax Exemption for Municipal Bond Interest:
State and local governments benefit from the tax exemption through significantly lower borrowing costs. Municipal bonds are used to finance a wide variety of infrastructure like schools, roads, bridges, airports, water and sewer systems, hospitals and many others. The tax exemption lowers the cost of financing these projects and encourages more infrastructure investment. The tax exemption is better than direct subsidies for infrastructure investment because bonds must be repaid, forcing a market test of the project’s viability.
Tax
Incentives for Retirement Savings:
Because of their tax-deferred status,
retirement plans may come under scrutiny as a way to reduce the deficit. SIFMA participates in a coalition of service
providers, plan sponsors and HR professionals - the Coalition to Protect
Retirement - with the goal of preserving the tax incentives that are critical
to encouraging Americans to save for retirement and to businesses sponsoring
plans for employees.
Capital
Gains and Dividends:
SIFMA and its members consistently have advocated for low federal income tax
rates on savings and investment and supports low capital gains rates and parity
between the rates for capital gains and qualified dividends. We believe that
these preferential rates provide a necessary and powerful incentive for
investments that benefits retail investors and strengthens the U.S. economy, and
that Congress and the Committee should be mindful of preserving these
incentives as discussions about tax reform unfold.
Financial
Transaction Tax:
SIFMA is opposed to the imposition of any
financial transaction and encourages lawmakers to consider the lessons of past
efforts to implement FTT laws in other nations. SIFMA believes an FTT would
raise the cost of capital needed by businesses and would amount to a new sales
tax on retirees and middle-class investors.
The full document submitted to the Senate
Finance Committee can be read here:
http://www.sifma.org/uploadedfiles/issues/tax/tax_reform/sifma%20views%20on%20tax%20reform%202017.pdf
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SIFMA is the voice of the U.S.
securities industry. We represent the broker-dealers, banks and asset managers
whose nearly 1 million employees provide access to the capital markets, raising
over $2.5 trillion for businesses and municipalities in the U.S., serving
clients with over $18.5 trillion in assets and managing more than $67 trillion in
assets for individual and institutional clients including mutual funds and
retirement plans. SIFMA, with offices in New York and Washington, D.C., is the U.S.
regional member of the Global Financial Markets Association (GFMA). For more
information, visit http://www.sifma.org.