Time Running Out To Pass Key Tax Measures

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

25 February 2004

With little working time left in a curtailed legislative session for the US Congress, Senators have earmarked important tax-related measures as a high priority in the months ahead of this fall’s federal elections.

Among these is the so-called FSC-ETI bill, the passing of which will replace current export subsidy legislation. According to Rohit Kumar, a senior aide to Senate Majority Leader Bill Frist (R-Tenn), the bill may be dealt with in the next three weeks, although now it is extremely doubtful that this will be soon enough to prevent the EU imposing tariffs on US exports, due to commence next month.

Indeed, some Republicans remain doubtful that the proposals will be enacted at all this side of the Presidential election, arguing that priorities lie elsewhere in the short term. "Frankly, we'd rather fight a trade war" than consider new legislation, was how one GOP member summed up feeling within the party earlier this month.

However, Senate Finance Committee chairman Charles Grassley has stated that it is foolish to gamble with EU tariffs, and is co-sponsoring alternative legislation with ranking Democrat Max Baucus, which would shave 3% off the top rate of corporate tax for US exporters.

Also in the remaining days of the legislative session, lawmakers are hoping to make progress on the Energy Bill, which contains tax relief to encourage the use of cleaner fuels.

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