Thomas Says EU Sanctions List May Provide New Impetus In Export Tax Row

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

17 September 2002

Republican Chairman of the House Ways and Means Committee, Bill Thomas has suggested that the release Friday of a wide-ranging list of EU sanctions on US goods may provide the spark for Congress to act on repealing a hotly disputed tax break for exporters.

Although several politicians have suggested that action is unlikely any time soon, Thomas believes that the publication of the EU list, detailing sanctions worth around $4 billion, may bring the reality home to the US authorities.

'There was a lot of hope that this would go away. We now know the hard, cold facts,' he explained on Friday.

The Ways and Means Committee chief has sponsored legislation designed to make sweeping changes to the US tax code, not only repealing the export tax break, but also curbing the use of tax shelters, and removing the financial benefits of offshore reincorporation. Due to the volume of changes proposed, the bill has been dismissed by many as Republican electioneering in the run-up to the congressional elections.

However, in a recent letter to lawmakers, senior Democrat on the House Ways and Means Committee, Charles Rangel stressed the need for both sides of the political divide to work together on this issue:

'I want to make [it] clear that no one should use the threat of retaliation or any possible confusion generated by the EU draft list as a pretext to press a partisan agenda,' he wrote, adding that: 'We have already seen the failure of one plan, because it was developed by a small group of legislators with no bipartisan input.'

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