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The last time America reformed the tax code, there were no cell phones, no Internet, and laptop computers didn’t exist. These life-changing developments have completely transformed our economy.
America is past due for a tax system that fits the 21st century. It’s not just unwise for our country to have a decades-old system that doesn’t match with the current global economic landscape. It is also detrimental to our country’s ability to compete on a global stage and prevents communities across the US from realizing greater opportunities for growth and prosperity.
The framework on tax reform released by congressional and administration leaders on September 27th will help solve this problem in one simple way: it will allow us to do more. It will allow companies like IBM to create more jobs here at home, invest more in American communities and our workforce, and support more programs in the United States that will lead to groundbreaking discoveries and innovations during this generation and the next.
Over the past year, IBM has committed to hiring 25,000 US workers by 2020. We have committed to investing $1 billion in education and training programs for our US workforce, and we are proud that thousands of our new hires will be veterans of the United States Armed Services.
But with tax reform, we can do more.
Meaningful tax reform, as outlined by the Unified Framework on Tax Reform, will create an economic environment more conducive to investment and job creation here at home. Currently, companies are more likely to leave foreign earnings offshore because of the second layer of U.S. tax imposed on already taxed foreign earnings. This is redundant and undermines economic growth in the U.S. But with a revamped tax system, companies would be more willing to bring those earnings home and reinvest in our communities and innovation in America.
IBM is a global company. We compete in nearly 170 countries, and 2/3 of our revenues come from abroad. But we have and always will remain deeply committed to investing in our American workforce and economy. That’s why over half of our research and development happens in America. This U.S.-based research includes pursuing groundbreaking science to find ways augmented intelligence technologies can better support people aging in place, or develop advanced computing architecture inspired by the human brain. But with a modernized tax code, we could do more.
Nearly a year ago, we launched a major effort to bring “New Collar” job opportunities to more Americans in communities historically underserved by the technology industry. These are jobs in high demand industries—like software development, cybersecurity, and cloud—where specific skill sets can be valued more than traditional bachelor’s degrees. To support this effort, we’ve partnered with local high schools, community colleges and other education institutions to build programs that provide 21st century skills development and training—in communities from Rocket Center, West Virginia, to Dubuque, Iowa, to Austin, Texas. With tax reform, we could expand these initiatives.
Our tax system should encourage companies to invest more of foreign earnings here at home in efforts to grow our American economy. Other countries understand this and make efforts to do so—and America risks losing its competitive edge on a global scale if the tax system remains as-is.
IBM has been a US company for more than a century, and we will always remain committed to our talented American IBMers who bring amazing innovations to our clients every single day. We will always strive to find new ways to expand opportunities for American workers and grow the American economy. But with tax reform, we all would be able to do more.
– Linda Evans, Director, IBM Government Affairs and Global Tax Policy