Boeing Co. and Lockheed Martin saw their shares plummet in December following a spate of tweets by President Donald Trump concerning the defense companies’ government contracts, but on Tuesday, they’ll ask Congress to do them a lucrative favor.
In a letter dated Friday but slated for public release Tuesday, 91 firms, including Boeing, Lockheed, General Electric Co. and International Business Machines Corp., implored senators and representatives of both parties to enact a drastic cut to the corporate tax rate, Reuters reported.
"We urge you to enact legislation that modernizes our tax system, allows America's businesses to better compete in the global marketplace and encourages job creation and innovation in the United States," the letter, which would be released by the Aerospace Industries Association, reportedly read.
The note cited a so-called “Blueprint” for tax reform released in June by the House Ways and Means Committee and authored by its chairman, Rep. Kevin Brady (R-Texas), that would do the following: draw down the corporate tax rate to 20 percent from its current level of 35 percent, completely restructure the Internal Revenue Service, and “clear out the bureaucracy by doing away with all the rules, regulations, forms, and instructions that won’t be needed with a simpler, fairer tax code.” It also suggested a 50 percent tax deduction on capital gains, dividends and interest received on company shares—something that would aid both large firms seeking funding and higher-income earners, who are more likely to invest in the stock market.
The U.S. had the third largest corporate tax rate in the word in 2016, with 35 percent at the federal level and an additional average state rate of just fewer than 4 percent. The only countries with higher rates were the United Arab Emirates, with 55 percent, and Puerto Rico, with 39 percent.
In a late February interview with CNBC, Treasury Secretary Steven Mnuchin promised a tax overhaul would arrive no later than the upcoming summer.
“We want to get this done by the August recess,” Mnuchin told CNBC's "Squawk Box" on Feb. 23, adding that the proposed tax cuts would simplify the corporate tax code. “We’ve been working closely with the leadership in the House and Senate and we’re looking at a combined plan.”