Bush Official Suggests Cautious Approach To ETI Replacement

by Mike Godfrey, Tax-News.com, Washington

20 August 2003

In an interview with the Wall Street Journal, White House budget director Joshua Bolten said that tax cuts for US manufacturers to replace the Extraterritorial Income Exclusion Act are unlikely to go ahead in the near future.

Following on from President Bush's recent statements that further tax cuts are not needed at present to stimulate the economy, Bolten suggested that the administration will take a more cautious approach on the ETI issue, focusing on containing the costs of any new measure.

"We prefer that whatever fix is done to [ETI] be done in a neutral way," Bolten told the WSJ, adding that the administration is working with legislators from both parties "to try to bring everyone around to a similar sort of approach."

However, Bolten's approach to the ETI issue is likely to bring him into conflict with House Ways and Means Committee Chairman Bill Thomas (R, Calif), who has proposed his own bill of tax breaks for US firms, costing around $128.2 billion over ten years.

Another proposal sponsored by Reps Phil Crane (R, Ill) and Charles Rangel (D, NY) is likely to find more support in the White House, with a price tag of $126 million over ten years, according to the WSJ.

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