Articles

June 23, 2011

Mr. Chairman, thank you for calling this important hearing today.  Our committee has been examining the impact of tax reform on U.S. multinational companies.  I'm pleased to now shift gears and focus on the equally important topic of the taxation of foreign-owned companies operating in the United States. 

In order to remain competitive in a global economy, foreign investment in the United States is critical.  This is especially true during these difficult economic times when job creation is more important than ever.  And foreign-owned companies create jobs here in the United States.  Today, these companies employ over 5 million Americans and support an annual payroll of over $400 billion.  In my home state of Massachusetts, U.S. subsidiaries of foreign-owned companies have created almost 190,000 jobs.

I was very pleased to hear the announcement by the White House Council of Economic Advisers on Monday that in 2010, foreign direct investment in the United States had increased by 49 percent from the low it reached in 2009.  I look forward to hearing today’s witnesses discuss how we can continue to encourage foreign investment in the United States.

Today’s hearing also will focus on whether our current tax system favors foreign companies over domestic companies.  One of today's witnesses will testify that foreign-owned companies have a significant competitive advantage in the U.S. marketplace over U.S.-owned companies.

In my opinion, we should treat foreign and domestic companies equally.  That's why I've introduced legislation to close the loophole that allows the use of excessive affiliate reinsurance by foreign insurance groups to strip their U.S. income into tax havens, avoid tax and gain a competitive advantage over American companies.

Before concluding, I’d like to thank the Chairman for his bipartisanship in developing this hearing.  Henry Ford once said, “Coming together is a beginning.  Keeping together is progress.  Working together is success.”  As we continue our work on tax reform, I hope that we can use this hearing as a model and continue to work together.  I believe that’s how we’ll best achieve success in reforming our tax system.  Thank you, Mr. Chairman.