Grassley Tightens Up His Leasing Tax Shelter Proposals

by Leroy Baker, Tax-News.com, New York

19 February 2004

Senate Finance Committee Chairman Charles Grassley has proposed modifications to his bill aiming to shut down abusive leasing tax shelters in the light of testimony by the Treasury Department last week which claimed that the problem was worse than feared.

The full Senate could take up Grassley’s leasing loophole-closer as early as the first week of March when it considers the package of export tax reforms aimed at staving off EU-imposed tariffs on US exports with legislation known as the FSC-ETI bill.

Grassley plans to modify his proposal to reflect new findings from the Treasury Department which claim that corporations have entered into leasing arrangements worth a total of $750 billion. The new measure will attack leases involving both foreign and US municipal infrastructure.

"These arrangements have resulted in US taxpayers picking up the tab for a huge portion of Europe's transit infrastructure and are now proliferating in cities across the country as tax shelter promoters shop their wares to cash-strapped local governments," Grassley remarked recently.

“Now the President, the Treasury Secretary, and the leaders of the Senate Budget Committee are all on board. We all agree that leasing shelter transactions are trickery at the taxpayers’ expense. This great rip-off has to stop,” he added.

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