The US Senate Finance Committee yesterday released its White Paper on international competitiveness, a possible signal of coming tax reform proposals.
In March, the committee set out on a program of ten weekly member briefings and discussions of key topics relating to tax reform. Each briefing is followed by the release of a white paper that briefly discusses that particular topic and offers major proposals for reform in that area. Each white paper states that the document should not be read as an endorsement of any proposals by Chairman Max Baucus (D-MT) or ranking member Orrin Hatch (R-UT). These documents merely describe reform proposals that would significantly change existing law.
The Committee meeting yesterday related to international competitiveness. The White Paper that was released yesterday may be found here.
While the documents are intended not to take policy positions, the discussion in the attached white paper suggests that the Finance Committee will likely adopt provisions that reflect the international reform draft released in 2011 by House Ways and Means Chairman Dave Camp (R-MI), which would:
- reduce the US corporate tax rate
- reduce incentives for multinationals to be foreign-based or to maintain profits offshore (by, among other things, adopting low tax rates on repatriated foreign profits) and
- enact anti-base erosion and profit shifting provisions to prevent US-based companies from shifting profits to “low-taxed foreign entities lacking relevant business substance.”
The House Ways and Means staff continue to seek a consensus both among the committee members and the business community on base erosion and profit-shifting provisions.