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Schumer Has International Tax Reform Plans For 2017

by Mike Godfrey, Tax-News.com, Washington

20 October 2016


Charles Schumer (D – New York), who would probably be Majority Leader if Democrats become the largest party in the Senate after the upcoming US elections, has said that international tax reform would be one of his priorities in 2017.

In an interview with CNBC, Schumer emphasized that international tax reform should look to encourage the repatriation of US multinational companies' deferred foreign earnings, so as to finance a large infrastructure program.

"If you can get overseas money to come back here, even if it's at a lower rate than the 35 percent it now comes back at, and you can use that money for a major constructive purpose such as infrastructure," he said, "if you did an infrastructure bank, for instance, you could get USD100bn in equity in the bank and get a trillion dollars of infrastructure."

Schumer made a similar proposal in last year's report of the Senate Finance Committee's international tax reform working group, which he led together with Rob Portman (R – Ohio). The working group backed the imposition of a transitional deemed repatriation tax at a rate significantly lower than the US statutory corporate rate (possibly as low as 10 percent), during the movement towards a new international tax system.

The problem that has been identified with such a proposal, however, is that most Republican lawmakers do not want to use the incoming funds for infrastructure spending, but rather to finance tax-cutting reform, while other Democrats would likely oppose what might be seen as a "giveaway" to US multinationals.

TAGS: tax | business | law | corporation tax | multinationals | United States | tax breaks | tax reform | BEPS

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