March 11,1999


WASHINGTON -- The Senate Finance Committee today held the first in a series of hearings looking at U.S. international tax policy. The following is the opening statement of Chairman William V. Roth, Jr. (R-DE):

"Let me begin by welcoming everyone to this important hearing, one that will examine an issue that is more important than ever: America's international tax policy.

"Today, capital investment, financial services, sales transactions, as well as communication, travel as quickly as it takes to click a computer key. American businesses no longer consist solely of American firms, manufacturing on American soil, and participating in the international market only through export sales. Today our firms buy components from overseas subsidiaries. They manufacture capital equipment and consumer goods from a multitude of areas around the globe, and then depend on an overseas subsidiary to market their products, close transactions, and provide follow-up support.

"To stay at the cutting edge of this dynamic and promising international economy, we need to fundamentally rethink our tax code with a view to enhancing American competitiveness. We need to make world commerce more accessible for our businesses -- our manufacturing, agriculture, marketing, financial and service industries. We must eliminate unnecessary complexity in the international provisions of the tax code. We must maintain and develop export opportunities that exist in our tax policies and make sure that they are consistent with our international obligations. We must assure that whatever revisions we undertake strengthen the integrity of our tax system. And we must make sure that our policies recognize and respond to the tax-related challenges of new technologies that facilitate not only financial transactions but traditional transactions.

"Finally, we must keep our eye on the long-term. When it comes to future changes in the global marketplace, we can only say that the past is prologue. The rapid -- almost miraculous -- changes of the last ten years only hint at things to come. In order to ensure that American companies can effectively compete in the new global economy, it is essential to have our country's pro-growth trade policies meld with our international tax rules. Today, more than ever, tax rules are playing a crucial role in business decisions. This morning, we will hear first-hand from DaimlerChrysler how the consideration of tax issues in that merger led to the company being based in Germany. And we will hear even more dramatic testimony from Intel -- a company, that given the opportunity, would locate their headquarters abroad. Our tax laws must encourage international businesses to come here and to strengthen U.S. businesses overseas. More competitive companies will, in turn, yield higher paying jobs for the American workforce. And this is what we all want."