Senate Finance Committee Chairman Max Baucus on Tuesday unveiled a sweeping package of proposed tax-code changes targeting corporations that do business overseas, including calling for a minimum tax on the income they earn worldwide.
The plan is the first of three drafts touching on revising aspects of the tax system that Baucus is to release this week. It comes after House Republicans last week indicated their tax-reform efforts — led by Ways and Means Committee Chairman Dave Camp — have been put on hold, at least for the rest of the year, and the prospect of any actual movement toward a tax revamp soon is unlikely.
Baucus's release of his proposal for "international tax reform" also follows a closed-door meeting with other senators on the Finance Committee. It is a response to the general notion that current law creates too many incentives for multinational corporations to invest and create jobs overseas. About $2 billion in U.S. corporate earnings are estimated to be parked overseas.
The Baucus draft describes some of the objectives of the proposals, which include reducing incentives for U.S. and foreign multinationals to invest in or shift profits to low-tax foreign countries; reducing incentives for U.S.-based businesses to move abroad; and simplifying the tax rules so that firms with the most sophisticated tax advisers are not advantaged.