The U.S. House of Representatives is working to pass its tax reform bill as the first step toward overhauling the U.S. tax system.
Ford is encouraged that Congress is considering:
· Immediately lowering corporate tax rates to grow the economy and increase incentives to invest in the U.S., and
· Promoting continued investment in innovation in research and development in the U.S.
Lowering the Corporate Rate
As a U.S.-headquartered company and the leading manufacturer of vehicles in America, Ford’s competitive position is significantly impacted by the U.S. corporate tax code.
One of our top policy priorities is a lower corporate tax rate, which would help put American companies on level playing field with foreign-based competitors. Over time, lower rates would allow Ford to invest more capital back in the business.
The last time corporate taxes were reformed in the U.S. was in 1986, when Ford first introduced the Taurus. Since then, countries around the world have worked to promote and grow their competitive industries with a pro-growth tax environment.
Outreach efforts were guided by cross-functional internal support, with Ford consistently engaging with policymakers from the administration and Congress on the importance of immediately reducing the corporate tax rate to domestic investment and economic growth.
Legislators listened and the proposed bill immediately cuts the corporate tax rate from 35 percent to 20 percent.
Continued investment in innovation
Another important priority for Ford is preserving our ability to expense research and development investments in the U.S. as the company makes advances in electric vehicles and smart mobility.
“Some policymakers have wanted to eliminate the expensing of research and development to pay for a lower corporate rate, and our competitors were more than happy to promote this idea,” said Curt Magleby, vice president, U.S. Government Relations.
“Ford invests nearly $7 billion in research and development each year, the majority of which is conducted in the United States, and we have been the strongest voice in the industry for tax policy that recognizes the importance of research and development for jobs and growth as we work to make our vehicles more sustainable, safer, and smarter.”
The released bill continues research and development expensing and credits to keep the U.S. on the forefront of global innovation and economic growth.
The Trump administration and congressional leaders have set a tight timeline, hoping to get a bill signed into law by the president by the end of this year.
The bill is currently moving through the full House of Representatives. The U.S. Senate is releasing its own version of the bill, which is expected to follow a similar framework. Once each chamber passes their bill, they will negotiate to reconcile the differences in a Conference Committee before sending it to President Trump for his signature.
While there is still a long way to go and changes can be expected, Ford will continue to work closely with Congress and the administration on tax reform to keep American manufacturing competitive in today’s global market.