August 9, 2021
Dear Virginia Congressional Delegation,
On behalf of the Virginia Chamber of Commerce and its members, I want to thank you for your support in helping the Commonwealth earn recognition again this year as the nation’s top state for business. This distinction would not be possible without your assistance and willingness to maintain conditions that enable businesses and employees here to thrive. It is in this spirit of cooperation and collaboration that we ask for your continued support in promoting tax policies that foster economic opportunity and prosperity across our Commonwealth.
The Virginia Chamber of Commerce appreciates the importance of smart tax policy, especially as we continue to deal with the effects of the COVID-19 pandemic. We have seen firsthand how Virginia’s workers and businesses of all sizes have been impacted by the pandemic. To ensure a swift recovery, we encourage Congress and President Biden’s Administration to pursue fund-raising strategies that do not negatively affect Virginia businesses and corporations driving our economic recovery.
It is our hope that you consider alternatives to harmful proposals that seek to raise the corporate income tax from 21% to 28% and the Global Intangible Low Tax Income (GILTI) rate from 10.5% to 21%. We believe these proposed increases could burden Virginia’s businesses with unnecessary and counterproductive financial disincentives at a pivotal time for the economy.
Virginia’s business and political leaders have worked diligently to foster a pro-business climate, which has allowed our state to become home to many of the world’s most successful multinational companies. This has brought immense growth to our state economy at all levels, including thousands of jobs. We have one of the best-educated workforces in the nation and we have the third-highest concentration of STEM majors. Innovation doesn’t just come to Virginia — it is created here. Well-intentioned, but misguided proposals like increases to the GILTI rate could needlessly punish companies who have grown into international players from right here in Virginia.
Additionally, after a year in which more than 400,000 small businesses across the U.S. closed, it is more important than ever to preserve an environment that can help stir recovery rather than limit it. The many small businesses, local restaurants, hotels, and other enterprises that faced unprecedented challenges need our support. And as we’ve seen time and again with increased tax rates, including the corporate rate, it’s the smaller businesses who would be hardest hit.
Beneficiaries of state programs that have enabled Virginia’s businesses to grow at home and abroad would also be at risk if these proposed tax changes were to pass. For instance, Gov. Ralph Northam’s recent praise for the Virginia Leaders in Export Trade (VALET) program, which helps Virginia companies move into international markets, highlighted the value in helping Virginia businesses increase export sales. The proposed federal changes would force these companies to pay more in taxes, impeding their ability to grow and impacting the 257,000 jobs and $2 billion in annual tax revenue that Virginia’s exports bring to the state.
These potential tax increases pose a risk to Virginia’s employers and their ability to create and sustain vital jobs, and we ask for your help in guarding against such an outcome. We know that with your continued support, Virginia will remain the nation’s top state for business and a critical catalyst to the nation’s success in the global marketplace. Thank you, as always, for considering our perspective.
President & CEO
Cc: The Honorable Mark Warner
The Honorable Tim Kaine
The Honorable Rob Wittman
The Honorable Elaine Luria
The Honorable Bobby Scott
The Honorable Donald McEachin
The Honorable Robert Good
The Honorable Ben Cline
The Honorable Abigail Spanberger
The Honorable Don Beyer
The Honorable Morgan Griffith
The Honorable Jennifer Wexton
The Honorable Gerry Connolly