Sean Neary/Ryan Carey
Baucus Unveils Proposals for International Tax Reform
Chairman Calls for Input on Discussion Drafts to Overhaul Key Areas of Tax Code
WASHINGTON – As part of his continuing efforts on tax reform, Senate Finance Committee Chairman Max Baucus (D-Mont.) today unveiled an international tax reform staff discussion draft. The proposal — the first in a series of discussion drafts to overhaul America’s tax code — details ideas on how to reform international tax rules to spark economic growth, create jobs, and make U.S. businesses more competitive. Additional tax reform discussion drafts will be released later this week.
“Over the past three years, the Finance Committee has examined every aspect of the tax code in an effort to fix a broken system. Through hearings, option papers and blank slate proposals, we’ve received input from key stakeholders and nearly every member of the Senate. These discussion drafts are the next step. They represent proposals collected throughout this process and provide a path forward on tax reform. Some are Democratic ideas. Some are Republican ideas. The common link is they are all ideas worth exploring,” Senator Baucus said.
While not a final plan, the staff discussion drafts are intended to spur a conversation about areas where Republicans and Democrats may be able to reach agreement on how to fix the broken tax code. Senator Baucus is also looking for additional feedback from stakeholders and the American public as he continues his work to overhaul the tax code. Feedback on the international tax reform discussion draft is requested by January 17, 2014 and comments can be sent to: Tax_Reform@Finance.Senate.gov.
The discussion draft released today focuses on overhauling the international tax system. Many of the major features of our current international tax system were created in the 1960s and address a world that no longer exists. The complexity and uncertainty in the U.S. tax code puts America at a disadvantage in the global economy and stifles competition.
Senator Baucus believes tax reform should motivate businesses to bring jobs and money back to the U.S. The discussion draft outlines proposals to:
- Make the U.S. more attractive and competitive for multinationals to invest and create jobs
- Reduce incentives for U.S. companies to move jobs or the entire company overseas
- End the trapped cash problem, allowing foreign profits to be invested in America again
- Make it harder for multinationals to shift profits to tax havens, which reduce our ability to invest in U.S. infrastructure, education, and other vital initiatives.
While Senator Baucus believes tax reform as a whole should raise significant revenue for deficit reduction, the international tax reform discussion draft is intended to be long-term revenue neutral.
“We need to bring our tax system into the 21st century and make the U.S. more competitive. That’s what tax reform can do – it can help America overcome the competitiveness crisis that’s driving businesses and jobs overseas,” Senator Baucus said.
Additional tax reform discussion drafts will be released later this week. They include proposals to streamline and reduce overly burdensome and costly tax administration rules, and to reform cost recovery and accounting. The discussion drafts are based on bipartisan ideas and incorporate bills introduced by both Republicans and Democrats.
The one page summary can be found here.
An overview of the discussion draft along with a detailed summary can be found here.
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