Ensign Amendment To Senate Tax Bill Welcomed

by Mike Godfrey, for LawAndTax-News.com, Washington

19 May 2003

Following the news that the Senate has passed a scaled back $350 billion tax cut package containing a temporary dividend tax cut and other elements of President Bush's original tax plan, including accelerated income tax breaks, tax breaks for married couples and families, and incentives for businesses to invest more in new equipment, the Center for Freedom and Prosperity has expressed its support for a last-minute amendment put forward by Senator John Ensign (R-NV).

Senator Ensign's amendment, which was co-sponsored by Senators George Allen (R-VA), Barbara Boxer (D-CA), and Gordon Smith (R-OR), lowers the tax rate on profits repatriated by companies to the United States from 35% to 5.25%, in a move designed to attract hundreds of billions of dollars back to the US economy.

'Senator Ensign and his colleagues should be commended,' Andrew Quinlan, President of the CFP observed on Friday, continuing: 'Reducing the double-tax on foreign-source income will encourage companies to invest money in the US economy. The Center for Freedom and Prosperity strongly supports this much-needed reform.'

Daniel Mitchell of the Heritage Foundation concurred, suggesting that:

'The Ensign amendment is an important step towards fundamental tax reform. Companies should not be taxed on income earned in other nations, and the Ensign amendment demonstrates that lawmakers understand that shifting closer to a territorial tax system - even if only temporarily - will increase investment at home and boost competitiveness abroad.'

The Senate must now resolve its differences over the tax cutting package with the House of Representatives, which has approved a bill that is very different in many respects. The House bill, for example, does not repeal dividend taxes, but lowers the top rate on dividends and capital gains to 15%.

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