Senator Wyden: Repeal foreign profit tax break (reduce corporate tax rate to 24 percent) [View All]

[ProSense]

Senator Wyden: Repeal foreign profit tax break

By Kevin Drawbaugh

(Reuters) - The tax code may be headed for some major renovation, and Senator Ron Wyden, a rangy Oregon Democrat, has come up with one of Congress' most complete blueprints.

Among his recommendations are slashing the corporate income tax rate, repealing a law that lets companies put off paying taxes on overseas income, and allowing a tax holiday for repatriation of foreign profits, he said in an interview.

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It would eliminate the law that allows a corporation to defer paying taxes on profits made overseas as long as the money stays abroad. Because of this law, an estimated $1.5 trillion in foreign profits is parked overseas, avoiding U.S. taxes.

Wyden-Coats would grant large corporations a onetime repatriation tax holiday, letting them bring that money into the United States at a rock-bottom tax rate. By eliminating deferral, Wyden said, his bill would sharply reduce the corporate tax rate to 24 percent from 35 percent.

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Twenty-four percent seems awfully low!

From the President's proposal, PDF

PRINCIPLES FOR TAX REFORM

1. Lower tax rates. The tax system should be simplified and work for all Americans with lower individual and corporate tax rates and fewer brackets.
   
   
2. Cut Inefficient and Unfair Tax Breaks. Cut tax breaks that are inefficient, unfair, or both so that the American people and businesses spend less time and less money each year filing taxes and cannot avoid their responsibility by gaming the system.
   
   
3. Cut the deficit. Cut the deficit by $1.5 trillion over the next decade through tax reform, including the expiration of tax cuts for single taxpayers making over $200,000 and married couples making over $250,000.
   
   
4. Increase job creation and growth in the United States. Make America stronger at home and more competitive globally by increasing the incentive to work and invest in the United States.
   
   
5. Observe the Buffett Rule. No household making over $1 million annually should pay a smaller share of its income in taxes than middle-class families pay. As Warren Buffett has pointed out, his effective tax rate is lower than his secretary’s. No household making over $1 million annually should pay a smaller share of its income in taxes than middle-class families pay. This rule will be achieved as part of an overall reform that increases the progressivity of the tax code.