US Congress Focuses On FSC Replacement

by Mike Godfrey, Tax-News.com, New York

21 December 2001

At a press briefing in Washington on Wednesday, Senate Finance Committee Chairman Max Baucus, (D - Mont.) said that a bipartisan group of House and Senate members are in the final stages of writing matching bills that aim to simplify US international tax policy.

"The real point is to make sure American companies are not disadvantaged," Baucus said. He added that the World Trade Organization's ruling on the US FSC Repeal and Extraterritorial Income Exclusion Act increases the need to update international tax policy. The US has appealed against the WTO ruling, which upheld the EU's objections to legislation passed in 2000 to replace the original, banned FSC regime, but few expect that the appeal will be successful.

Hence the need for a new approach to the international tax regime for US companies. Congressmen at the briefing said they plan to simplify and reform international tax policy in order to make US multinational companies more competitive abroad.

House Ways and Means Committee members Amo Houghton, R-N.Y., Sander M. Levin, D-Mich., and Sam Johnson, R-Texas, were planning to spend December 20 putting the final touches on 30 provisions designed to eliminate tax complexity and barriers to international competitiveness. "It's the right thing to do; we've got to get at this thing now," Houghton said.

Beats Christmas shopping, anyway.

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