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KevinTheOmnivore KevinTheOmnivore is offline
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Old Sep 20th, 2003, 09:13 AM        Bipartisanship is really inspiring....
http://www.washingtonpost.com/ac2/wp...nguage=printer

Senators Present Proposal to Cut Taxes


By MARY DALRYMPLE
The Associated Press
Thursday, September 18, 2003; 4:08 PM


WASHINGTON - Senate tax-writers have put together a bill that would save manufacturers billions of dollars in corporate taxes in an effort to aid a sector of the economy that has shed 2.7 million jobs over the past three years.

The plan announced Thursday would drop tax rates for all U.S. manufacturers, saving them about $50 billion over a decade. Keeping watch on an economy that is gradually recovering but producing few new jobs, the senators said the cuts would make the companies more competitive.

"We must stop the job losses in America's manufacturing sector," said Sen. Max Baucus, D-Mont. "Reducing taxes on these businesses is a critical first step to ensure our businesses compete in an increasingly global marketplace."

The early years of the cuts would direct the most benefits to domestic producers. But by 2013, all manufacturers will benefit from a 3 percentage point reduction in the top corporate tax rate. The bill also streamlines rules for companies that operate overseas, ensuring they are not punished when they expand their U.S. operations.

"U.S. businesses are under more pressure than ever in an era of expanding global markets," said GOP Sen. Charles Grassley of Iowa, chairman of the Senate Finance Committee. "This bill will increase the ability of U.S.-based operations to compete with foreign competition abroad and on U.S. soil."

Pressure to help domestic producers has been building steadily in the House. Two of the House's most senior tax writers have gathered 145 supporters for a manufacturing tax cut they proposed this spring. It cuts taxes for domestic producers by 10 percent, reducing the top rate from 35 percent to 31.5 percent.

Like the Senate bill, companies with more U.S. production enjoy more tax breaks. Reps. Philip Crane, R-Ill., and Charles Rangel, D-N.Y., said the new Senate bill follows their lead.

"Their bill is written along the same lines as our bill," they said. "It's clear a bipartisan, bicameral consensus has emerged to focus tax benefits on U.S. manufacturing."

The drive to write a corporate tax bill is being pushed by an ultimatum from the World Trade Organization, which has declared a $5 billion annual tax break an illegal export subsidy.

Congress must eliminate the tax break or face up to $4 billion in punishing sanctions that could be imposed by the European Union. Lawmakers agree they must eliminate the tax break, and they now must decide who benefits when they redirect the tax advantage.

House Ways and Means Committee Chairman Bill Thomas, R-Calif., proposed a corporate tax cut for businesses with taxable income of $10 million or less. It would help 99.7 percent of all American companies, he said.

Other portions of his bill respond to issues raised by multinational corporations. They said the tax code's old rules hamstring companies with worldwide operations and must be updated to reflect a global economy.

Thomas has since been talking with House leaders about a rate cut for domestic manufacturers that drops the top rate from 35 percent to 32 percent. The companies would have to meet a test to qualify as a domestic manufacturer.

While lawmakers discuss how best to bolster the nation's manufacturers, others will be keenly looking at the bills' bottom lines.

The bill just proposed by Grassley and Baucus raises revenue and cuts taxes equally, making its effect on the Treasury neutral. It takes advantage of money saved by closing the offending $5 billion annual tax break and also raises revenue by closing down corporate tax shelters and extending customs fees.

Thomas includes similar revenue raising proposals. His broader array of tax breaks comes with a $128 billion, 10-year net cost.


© 2003 The Associated Press
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mburbank mburbank is offline
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Old Sep 22nd, 2003, 10:04 AM       
I kow a great way we could fund those tax breaks. Recinding ll the other tax breaks.
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