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April 13 — Lawmakers' plans to release international tax overhaul legislation by mid-July look to be slipping further, making prospects less clear than ever.
There is currently no timetable to release a draft, House Ways and Means Committee Chairman Kevin Brady (R-Texas) told Bloomberg BNA late April 12, the House’s first day back from recess, even as the Ways and Means Tax Policy Subcommittee continues working on the issue under the direction of its chairman, Rep. Charles Boustany Jr. (R-La.).
Early this year, Brady said he wanted to mark up international tax legislation. Boustany previously said he hoped to introduce language in March to establish a dividend exemption tax system, cut corporate tax rates and reduce tax rates on income derived from intellectual property, through what is often called an innovation box or patent box.
But that schedule changed. Boustany has scaled back his goals to include dividend exemption taxation and maybe the innovation box; at the same time, Brady has slowed the timeline.
“I think that our committee goal at the beginning of the year was to come up with draft legislation on international, and I want to verify with the chairman that that is still the plan,” Boustany told Bloomberg BNA April 12.
He wants to keep pushing forward, spurred in part by recently proposed Treasury Department rules on inversions. Some tax lobbyists have said the administration's actions should motivate lawmakers to speed the legislative process.
Brady and Boustany both called Treasury's approach punitive.
House Republicans are aiming to generate a broader tax overhaul blueprint before the Republican convention in mid-July, Brady said.
A tax task force created by House Speaker Paul D. Ryan (R-Wis.) has been meeting to discuss party-wide ideas around major changes to the tax code. Its next meeting is scheduled for April 14.
“Things have slipped back because of the task force process, and I want to keep driving our committee process too,” Boustany said.
Asked how the new Treasury anti-inversion regulations would change any tax overhaul plans, Brady said the department “took the Band-Aid approach on these inversions and in fact probably penalized companies retroactively for following the rules and laws in place.”
He called the regulations a mistake and said he is evaluating them “from the standpoint that Treasury might have overstepped their authority.”
Across the Capitol, Senate Finance Committee Chairman Orrin G. Hatch (R-Utah) sounded a similar note in questioning whether or not Treasury has exceeded its authority.
Treasury’s move underscores a need for Ways and Means to advance its international tax plans, Boustany said.
Improving U.S. companies' competitiveness is his imperative. Still, though Boustany said he doesn't think Brady is wavering, Boustany needs the chairman's green light before releasing his updated innovation box plan and the fuller international tax draft.
“I have a sense of urgency and I do want to pull the curtain back on this,” Boustany said. “We can at least send a positive signal that we’re preparing that part of the tax code for early next year, so that it’s on the shelf ready to go early next year. I want to push, I want to push. My job is to be the cheerleader to make something happen.”
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