Senior Republican Rebukes Government Over Lack Of Action On Export Tax Breaks

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

13 February 2004

A senior Republican has complained that the Bush administration is not doing enough the resolve the trade dispute with the European Union, and has urged more intensive action to push through new export tax legislation.

Speaking before the House Ways and Means Committee, Rep. Nancy Johnson (R-Conn) accused the leadership of being “somewhat lackadaisical” in its attitude towards the issue, and expressed concern that greater emphasis has not been placed on repealing the Extra-Territorial Income Exclusion (ETI) legislation, which the WTO has ruled breaks international trade law.

Johnson, who is the fourth-ranking member of the Ways and Means Committee, argued that international tax reform is "the biggest thing we could do to protect existing jobs and to bring jobs back to our country."

The House and the Senate are currently in the process of considering two major bills that will replace the export subsidies. This includes a bill sponsored by Ways and Means Committee Chairman Bill Thomas who has proposed a 3% cut in corporate tax for American manufacturers to 32% by 2007, costing approximately $60 billion over the next decade.

However the Treasury has made it known that it would prefer any replacement tax break for US exporters to be revenue neutral.

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