Texas Businesses' Letter to DeLay Urging Repeal of FSC/ETI

June 20, 2003

[2] As you know, the World Trade Organization has ruled that the U.S. FSC/ETI export tax incentives violate international trade rules and must be repealed or the United States could face up to $4 billion in annual export sanctions from the European Union. In responding to the WTO FSC/ETI ruling, we believe that the Congress should take account of the vital role that U.S. companies with global operations play in increasing U.S. exports and U.S. jobs.

[3] We agree with the Bush Administration's views on this matter -- articulated in the FY 2004 Budget -- that "in order to ensure the ability of U.S. workers to achieve higher living standards, we must ensure that the U.S. tax law does not operate to hinder the ability of the U.S. businesses that employ those workers to compete on a global scale."

[4] Mr. Majority Leader, we encourage you to support the legislative approach (along the lines of the bill expected to be introduced by Chairman Bill Thomas) that would repeal FSC/ETI and replace it with important pro-employment business tax provisions that, among other things, address fundamental inequities in our international tax system. The current U.S. international tax rules have the perverse effect of hampering the global competitiveness of the full range of American, and Texas, companies -- i.e., manufacturers, services, high technology and agriculture.

Sincerely,