Tax

Congress May Reexamine Tax Shelters

After passing the $1.35 billion tax cut, legislators are looking for ways to bring in additional revenues without overtly raising taxes.
CFO.com StaffJuly 10, 2001

Legislation aimed at closing down corporate tax shelters could soon surface on Capitol Hill, Senator Charles Grassley, R-Iowa, the ranking minority member of the Senate Finance Committee says.

According to Dow Jones Newswires, the panel, now chaired by Senator Max Baucus, D-Mont., held hearings on the topic last year and published two bipartisan discussion drafts, but took no action.

But with Congress essentially now on a pay-as-you-go basis following enactment of the $1.35 billion, 10-year tax cut and with many other tax breaks left to be considered, legislators are looking for ways to bring in additional revenues without overtly raising taxes. “Offsets” are thought to be necessary to avoid dipping into surpluses attributable to Medicare and Social Security, says Dow Jones.

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“Some corporate tax shelters could be examined in the course of any upcoming mark-ups,” Grassley told the Tax Coalition.

That could be soon, according to Dow Jones. The finance panel may act “possibly within the next two weeks” on tax breaks for small businesses and farmers in connection with a proposed increase in the minimum wage, the Senator said. He also said the panel will likely consider energy tax incentives and the extension of a variety of expiring tax breaks, among other things, before the end of the session.

As for tax shelters, Grassley said he favored acting to curb abuses, so long as it can be done without interfering with legitimate business transactions, reports Dow Jones.