Approach to Taxing Foreign Income Remains Elusive as Reform Tour Begins

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As the chairmen of the congressional tax-writing committees travel together to tout their effort to revamp the U.S. tax system, one key element of the corporate tax code—how to tax multinational corporations—still has them on roads that do not quite meet.
House Ways and Means Committee Chairman Dave Camp (R-Mich.) has said the United States should switch from a worldwide tax system, in which companies are taxed on profits earned anywhere, to a territorial system that taxes only those profits earned in the United States—an idea supported by the 3M Co., the lawmakers' first stop on the tax reform tour July 8.
Camp's counterpart, Senate Finance Committee Chairman Max Baucus (D-Mont.), has stopped short of endorsing that approach, suggesting instead that a “hybrid” system that takes elements of each concept may be the way to go.