Business Tax Cut Legislation Unveiled in Senate

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http://www.nytimes.com/reuters/politics/politics-congress-taxes.html

Business Tax Cut Legislation Unveiled in Senate
By REUTERS



Filed at 7:22 p.m. ET
WASHINGTON (Reuters) - Pushing to avert a damaging trade war with the European Union, two key Senators unveiled legislation on Thursday that would repeal tax subsidies for U.S. exporters that violate global trade rules and use the money to reduce tax rates for domestic manufacturers.Senate Finance Committee Chairman Charles Grassley, an Iowa Republican who is sponsoring the legislation along with Sen. Max Baucus of Montana, the top Democrat on the panel, said the bill will avert a trade war while helping U.S. businesses.... current U.S. tax breaks for exporters violate trade rules..EU... to hit American goods with $4 billion a year in punitive tariffs if Washington fails to repeal the tax subsidies. U.S. lawmakers have said they hope to advance the tax legislation by the end of the year to avoid sanctions.The Grassley-Baucus bill would repeal the export tax breaks and use the $50 billion in savings over 10 years to give companies with manufacturing in the United States a tax break that will gradually lower the top 35 percent business tax rate to 32 percent.<snip>

The bill also includes about $25 billion in tax breaks for U.S. multinationals who complain that American tax laws make it hard for them to compete in global markets. The bill would allow companies to make more generous use of foreign tax credits that were designed to prevent double taxation of income.<snip>

A bill sponsored by House Ways and Means Committee Chairman Bill Thomas, a California Republican, would offer more generous international tax reform, but would cost the federal Treasury about $130 billion over 10 years. <snip>.