WASHINGTON — Senior executives from Macy’s Inc., The Walt Disney Co. and FedEx Corp. raised concerns on Capitol Hill Wednesday about the nation’s high corporate tax rate, saying it puts them at a commercial disadvantage and calling on the government to reduce the rate to enable them to become more competitive and create jobs.
The executives spoke at a panel discussion hosted by Reforming America’s Taxes Equitably, or RATE, a coalition comprised of 26 companies, including the three represented on the panel, as well as such corporations as Nike Inc., CVS Caremark Corp., The Boeing Co., AT&T Inc., Viacom Inc. and the National Retail Federation.
The corporate tax rate in the U.S. is 35 percent, which ranks as the second highest in the developed world behind Japan, according to RATE. The combined average statutory corporate tax rate in the Organization of Economic Cooperation, excluding the U.S., has declined to 25.1 percent from around 39 percent, over the past 20 years, the coalition said. RATE also cited a World Bank study that ranked the U.S. 62nd (tied with Uganda) on the “ease of paying taxes.”
Sen. Rob Portman (R., Ohio) told the conference he plans to introduce bipartisan legislation this year that would lower the corporate tax rate to 25 percent and address the issue of repatriating profits made abroad, which under the current system is taxed when it comes back to the U.S. Even with bipartisan support, the legislation could face long odds this divisive election year.
Bradley Mays, senior vice president, tax, at Macy’s, said: “Being taxed at higher effective tax rates means we have less money to make available to make capital improvements, invest in innovation to stay competitive, create new jobs, offer higher compensation to our employees and offer lower prices to our customers, and it makes us less attractive to investors in the capital market.”
Macy’s pays an effective corporate tax rate of about 37 percent, Mays noted.
“Some of our competitors in our industry have effective tax rates that are substantially lower than ours,” he said. “The main reason for this disparity is they have a significant portion of their earnings overseas, which are taxed at a much lower effective tax rate. This effective tax rate disparity puts us at a significant competitive disadvantage.”
Other areas of the U.S. tax code are also “problematic” for Macy’s, including temporary measures such as the Work Opportunity Tax credit that must be periodically renewed by Congress. The credit has currently expired and is caught in gridlock in Congress.
“We are a member of RATE because we believe the U.S. tax code needs to be fundamentally reformed, by significantly lowering the U.S. tax rate in exchange for a broadening of the income tax base,” Mays added.
Anne Buettner, senior vice president for corporate tax at Walt Disney, which pays an effective corporate tax of 34.6 percent, said, “We believe the best way of achieving a competitive tax system is through a reduction of the tax rate. A lower rate in the U.S. would result in the elimination or mitigation of several of the challenging issues that exist today. It is our view that a lower U.S. corporate income tax rate will help stem the flow of intellectual property and related jobs out of the U.S., and we believe that a substantially lower corporate income tax rate will increase U.S. investment and attract foreign capital to the U.S.”
Michael D. Fryt, corporate vice president for tax at FedEx, said the company has paid an effective rate of 35 percent for the past 20 years. Fryt said the current corporate tax code “creates distortions in economic decision-making, diverts capital from its most efficient and effective use and leads to lower wages and employment.”
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast