mr. heenan, that's where you come from. and i think that somewhat motivates your -- i won't say hesitation. i think it's kind of a well-rounded response. thank you. >> thank you. mr. johnson is recognized for five minutes. >> thank you, mr. chairman. mr. fryt, how low would we have to get the rate before you guys could take over the postal service? >> do i have to answer that question? >> well, you're doing a good enough job right now. >> can i have a lawyer with me? >> i've got a place out in new mexico where you'd deliver to the door, and the postal service doesn't even come. >> well, if you ever have a problem, just give me a call, please. i'll help. >> in your testimony you say the ideal reform would lower the rate to at least 25% and include incentives for investments such as bonus depreciation. however, you also say you are willing to put all base broadeners on the table for significantly central reform tax code with a materially lower tax rate. what rate would that be if we were to give up all the other nicks? zblit r

mr. heenan? >> good morning. thank you for inviting me today and i appreciate it. i'd like to start by commending you, chairman, and the rest of the committee, for tackling this important topic of tax reform. we support the efforts and appreciate the time to talk about it here today. i'd like to start to give a little bit of a background about -- maybe not a household name. we sell air. we sell the components air. we can sell to a food and beverage company for a night again in your potato chip bag. the fizz in your soda. big companies, steel kpaenls that yooiz tons and tons of gases so a very diverse customer group. we have about $11 billion in sales worldwide and we're the largest industrial gas producer here in the united states. important, we spend about $2 billion a year on new capital investment. we go through a very rigorous process. we sit at a able to with the seen your leaders on each new project and they tend to be big projects and we discuss capital investment and we compare projects a

mr. heenan argues that promoting investment accelerated depreciation is, perhaps, a more powerful tool than lower overall tax rates. you, however, say with respect to targeted tax incentives such as bonus depreciation, there's very little evidence that these policies have spurred any investment. can you comment on that? >> yeah, my statement is based on the, you know, the weight of the evidence and the literature. and basically, there are papers that will show there's a time effect. so firms will shift a purchase of equipment to a period that's earlier, say, by december instead of january. there's also evidence that firms will purchase a different class of asset. but what we can't tell in the literature and what is very difficult to parse out is whether these are, you know, part of it's just timing. part of it's just shifting. and some of it could just be a change in reporting. in other words, when you say a certain class of asset gets a certain benefit, they might just now record different assets differently. we can't tell that in the literature. the research that tries to look at aggregat

mr. heenan? >> i think our sole focus should be about growth and how do we get growth and jobs. so i think sometimes there is a difference between equal and fair. and we should be focusing on growth. so while i think a lower tax rate certainly for us would put more cash in our pocket to spend on new investments, some of the targeted tax expenditures that are out there may have a bit more leverage than a lower tax rate. so we have to look that very closely. what is right i think is what promotes growth and jobs. and that might not be equal, but it's probably fair for the country overall. >> okay. thank you. i yield back. >> mr. kind is recognized. >> thank you, mr. chairman. i want to thank the panelists for your testimony today. always very illuminating and interesting. let me just raise a couple concerns and get your reaction on a few things. sometimes we're not really comparing apples to apples. i think everyone is in agreement that the goal should be to try to lower the base, simplify, expand

mr. heenan, that's where you come from. nd i think that some what motivates your, i was a hesitation, i think it's kind of a well-rounded response. thank you. >> thank you. mr. johnson is recognized for five minutes. >> thank you, mr. chairman. mr. fryt, how well -- how low would we have to get the rate before you guys could take over the postal service? [laughter] >> to i have to answer that question? you're doing a good -- i've got a place out in new mexico where you deliver to the door, the postal service doesn't even come. pic if you ever have a problem just give me a call, please. we will help. >> in your testimony you say the id of reform would lower the rate to at least 25%, including incentives for investments such as bonus depreciation. however, you also say you're willing to put all base abroad nurse on the table for significantly simpler and reform corporate tax code with materially lower tax rate. what rate would that be if you, if we were to give of all the other next? >> it really depends, mr. johnson but it de

mr. heenan. if we were able to adjust depreciation schedules within the overall tax strategy that would provide the ability, knowing the tax liability would be the same for your company in the longer term, but to do it on a more proportional basis. when there's a great year and the well is full of watt e, the idea of let's go ahead and make this capital investment to be leaned up and red dwi for more difficult times, being able to control costs. you've got the ability to invest in those technologies, knowing that there will be abdown cycle eventually. i'm thinking heavy manufacturing, the energy industry, areas that i saw that were very reluctant to get involved and make these vems. or say maybe if you have a great year, a small $50 million company could invest in $8,000 machine tools and write them off in one year, but know they're going to take that but the idea longer term is those jobs are protected and they become more competitive. where this gets particularly challenging to me is looking at

mr. heenan? >> yeah, you know, i mentioned earlier we spend $2 billion in capital and we look at our projects. and if we miss, it's a big deal. if we spend $200 million in the place, it's a big deal. i commend chairman camp for taking on this difficult task. i would just say this is a big deal. and if we miss on how we do this, we're going to regret it. so i agree that we should move quickly, but i think we have to be cautious in looking at the specific expenditures and the specific way we do this. we don't want to miss on this one as a country. >> mr. neubig, please? >> i guess two points. phasing down the corporate tax rate is what has been done in canada and the united kingdom. i guess if the alternative is not doing a lower corporate tax rate, i think phasing down would be much preferable. in the case of the united kingdom, they have a parliamentary system. and they have announced that they are going to get to a 23% corporate tax rate by 2014-'15. one interaction in terms of the financial acc

mr. timothy heenan, at prax air, the largest provider of gases in north and south america. he joined in 2004 from earnst and young specializing in the development and implementation of international tax strategies. thank you all very much for your time and the committee has received each of your written statements and they'll be made part of the formal hearing record. each of you will be recognized for five minutes for your oral remarks, followed by questions. so mr. fritt, we'll begin with you. you're recognized for five minutes. >> good morning. chairman camp, ranking member levin and members of the committee, i very much appreciate this opportunity appear before you today to discuss the importance of tax reform to fedex. we believe reducing the u.s. corporate tax rate significantly to be more in line with the rest of the developed world is essential to overall economic and job growth. and will help our company continue to invest in critical infrastructure to compete and grow. before i tell delve into the details of how we analyze tax reform i'd like to make a couple of p