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The proposed legislation would cut the top corporate tax rate from 35 percent to 32 percent for domestic manufacturers, producers, farmers, and small corporations.
Stephen Taub, CFO.com | US
June 16, 2004
The House Ways and Means Committee approved a bill that would end European Union trade sanctions against American manufacturers and farmers and provide $143 billion worth of corporate tax breaks over the next 10 years, according to published reports.
The full chamber will probably vote on the bill later this week. Similar legislation was recently passed by the Senate, so the House bill has a good chance of becoming law, pointed out The New York Times.
"The genius of American politics is accommodation and compromise — and this legislation reflects that mix,'' said Ways and Means Chairman Bill Thomas (R-Ca.), in a statement. "Fixing our international tax law is long overdue, and we've balanced those changes with tax relief for manufacturing and small corporations to help create new American jobs."
The main purpose of both bills is to replace a $5 billion annual tax break for American exporters that has been declared illegal by the World Trade Organization, noted the Times.
The House bill would cut the top corporate tax rate from 35 percent to 32 percent for domestic manufacturers, producers, farmers, and small corporations. It would also tax U.S. companies operating overseas, noted Bloomberg, and provide $9.6 billion to compensate tobacco farmers who abandon a Depression-era program that controls tobacco prices and supply levels.
Republicans on the Ways and Means Committee beat back several Democratic amendments, added the wire service, including one that would have delayed tax cuts for multinational corporations and another to ban the Internal Revenue Service from hiring private companies to collect delinquent debt.
Republicans also defeated an amendment to make permanent the sales tax deduction, which would expire after two years in the bill, and eliminate the tax breaks for multinational corporations to pay for it, Bloomberg pointed out.