Baucus Proposes New Minimum Tax on Corporations in International Draft

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Senate Finance Committee Chairman Max Baucus (D-Mont.) proposed a broad outline for revamping the U.S. tax code's international provisions, seeking to ease the overall tax bite on U.S. corporations while imposing a new minimum tax on income from services and goods they sell into foreign markets.
The proposal won praise from Democratic lawmakers but fell flat with Republican members of the committee, who complained about both the substance and timing as Congress grapples with competing budget proposals.
Among highlights, the discussion draft—written in legislative language but not introduced as a bill—would abandon the system of tax deferral, instead imposing taxes immediately or not at all on the income of U.S. corporations' operations in foreign countries. It offers two options for taxing income from goods and services sold into foreign markets, which would be taxed at either 60 percent or 80 percent of the U.S. corporate tax rate—a minimum tax on corporations.
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