At P&G, we have long believed that U.S. tax reform is crucial for both our company and the U.S. economy. The House Ways and Means Committee's completed Tax Cuts & Jobs Act, with its competitive corporate rate and a modern tax system more aligned with the rest of the world, is a positive step toward modernizing the United States’ outdated tax code and putting American firms like P&G on a more level playing field with our non-U.S. competitors. While there is still work to do as tax reform goes through the legislative process in the coming weeks, this is a unique opportunity to reform the U.S. tax system for the first time in more than 30 years, strengthening the U.S. economy and helping P&G and other American companies succeed around the world, benefitting their communities and workers.
P&G Global Company Communications
P&G Perspective on U.S. Corporate Tax Reform
Tuesday, October 31, 2017 4:22 pm EDT
For 180 years, P&G has supported public policy issues important to P&G’s business. We approach public policy challenges and changes with a long-term and future-facing outlook. At P&G, we believe U.S. tax reform is crucial for both our company and our country. P&G Vice Chairman and CFO Jon Moeller shared his perspective today on PG.com.
Tax Reform Supports American Jobs and Economic Growth
P&G has long supported U.S. corporate tax reform to help stimulate economic growth. While the details of the proposed tax reform framework being worked out by Congress over the coming weeks will matter very much, I applaud their efforts toward modernizing the United States’ outdated tax code. The proposed competitive corporate rate and shift toward a territorial system will help put American firms on a more level playing field with global competitors — creating value for P&G shareholders, employees, consumers and suppliers.
P&G is a global success story with strong American roots. We have more than 100 manufacturing facilities that serve 5 billion consumers in more than 180 countries around the world. Since the company was founded in 1837, we have been headquartered in Cincinnati, Ohio. Today, we are a robust U.S. manufacturer with 25,000 US employees and 25 manufacturing facilities across the country.
P&G has a focused portfolio of 65 brands in 10 core categories – many consistently ranked #1 in market share – where products solve everyday problems for our consumers. In fact, more than 95% of American households have at least one P&G brand in their houses. These include such trusted, familiar brands as Tide, Pampers, Always, Oral-B, Head & Shoulders, Old Spice, Vicks, Dawn and Bounty. Globally, P&G competes with other multinational companies – whether headquartered in the U.S. or overseas – as well as local brands in many countries.
The U.S. tax system puts American companies at a competitive disadvantage in the global marketplace, with the highest corporate income tax rate in the developed world (35%) when other developed countries’ rates are trending down (average of about 24%). This makes it harder for P&G and other U.S.-headquartered businesses – small and large – to compete with peer companies headquartered overseas, and reduces the competitiveness of the U.S. economy as a place to do business and create jobs. The framework’s proposed rate of 20% would boost economic growth and allow P&G to better compete with a rate closer to that of our foreign competitors.
A modern territorial tax system would help American companies, including P&G, compete on a level playing field. Unlike P&G, competitors headquartered outside the U.S. do not pay additional tax to their home countries when they sell products outside their home countries. About 60% of P&G’s sales are global as we manufacture close to the consumers we serve around the world. Importantly, our growth outside the U.S. – where 95% of the world’s consumers live – creates and supports jobs here in the U.S. In fact, about one of every five of P&G’s U.S. jobs and two of five P&G jobs in Ohio, support our global business, with roles that include manufacturing, marketing, research and innovation and supply chain management.
At Procter & Gamble, we believe tax reform is crucial for both our company and our country. We hope this week will mark an important step forward toward competitive and pro-growth policy change. The details will matter, but a tax system with a competitive rate and a modern territorial tax system will level the playing field for U.S. businesses and workers – including P&G’s U.S. employees.
We hope the House and Senate will issue legislation that will make the U.S. and U.S. businesses more competitive, and look forward to working with Congress and the Administration as this process moves forward.
Jon R. Moeller Vice Chairman and Chief Financial Officer The Procter & Gamble Company