McLernon: Congress Leads the Way in ‘Protecting US Workers,’ Comments from congressional leaders a positive step toward stopping harmful Treasury proposals
WASHINGTON – Nancy McLernon, president and CEO of the Organization for International Investment (OFII), issued the following statement in support of Chairman Hatch, Chairman Brady and Rep. Boustany and members of the Ways and Means Committee for their recent comments regarding the Treasury Department’s debt/equity proposals:
“Treasury’s effort to push through sweeping regulations in record time will clearly impact far more employers than the ones they claimed to be targeting. As congressional leaders from both sides of aisle have made clear, Treasury’s proposed regulations will make investing in a new factory even more costly at a time when America needs the quality jobs that global investment can provide. On behalf of the 24 million U.S. workers whose jobs are tied to foreign direct investment, I applaud Chairmen Hatch, Brady, and Boustany, as well as other members of the Ways and Means Committee, for urging the Administration to slow down and make necessary changes so that the livelihoods of millions of U.S. workers are not jeopardized.”
In July, OFII and Business Roundtable released a study providing a quantitative analysis of how the U.S. Treasury Department’s proposed debt/equity regulations would affect U.S. economic competitiveness. The report examined how Treasury’s rules would affect investments in the United States using illustrative examples.
For an inbound employer that was unable to restructure its financing, the increased tax burden (due to loss of tax treaty benefits) would be equivalent to a corporate tax rate increase to more than 100 percent, making its investment in the U.S. economy unprofitable. The report also estimated that the compliance costs of the Administration’s proposed regulations for a Fortune 100 company would be $1.25 million annually, with first-year costs of $4 million after accounting for the costs of new systems required for documentation and compliance.