TThe Electronic Industries Alliance, which represents nearly 1,000 U.S. companies across the broad spectrum of the information & communications technology and electronics sectors, appreciates the many steps taken in recent years to enhance business competitiveness, encourage investment and reward savings through improvements to the U.S. tax code. As our industry operates within an increasingly complex and competitive global marketplace, we believe there are additional measures that would further improve our system and level the worldwide playing field. As policymakers consider further reform, EIA believes the following principles should be used to measure efficacy and merit:

1. Tax reform should foster economic growth and enhance the ability of U.S. companies to compete at home and abroad. U.S. rules must be competitive with the systems of other countries, particularly those of our key trading partners, and it is essential to eliminate cases of double taxation, which unduly burden companies and put U.S. businesses at a competitive disadvantage globally. In addition, the U.S. system must not incentivize companies to keep as much of their income as possible overseas in more tax-friendly markets. Lowering the effective corporate tax rate would exponentially benefit the U.S. economy.
2. The tax code must provide stability and certainty, allowing companies to engage in more efficient tax and business planning and ensuring transparency for investors. It is important that any reform measure should also ensure adequate transition periods, allowing reasonable treatment for those who have established business and tax plans within the bounds of the current rules.
3. U.S. tax policy should recognize the critical contribution of research and innovation and should provide reasonable incentives that encourage individuals and companies to innovate.
4. Any reform measure should encourage domestic investment, including foreign direct investment. It is critical that the tax code recognize the economic and social contributions of all U.S. employers, including the U.S. subsidiaries of foreign-owned corporations. The system should be equally fair and neutral for employers of all sizes.
5. Any changes in the tax code should seek to eliminate complexity wherever possible. For example, it is critical to eliminate the burden of the corporate and individual Alternative Minimum Tax, which impacts more U.S. taxpayers each year. This complex second tax system has a perverse impact on companies by increasing their taxes when there is an economic downturn.
6. U.S. tax policy should be designed to maximize growth of the economy and facilitate investment in the future health of the nation through measures that encourage capital spending.