TAX TAKE: Thursday's Senate Finance Committee Hearings Kicks Off Debate Over Potential International Tax Law Changes
On Thursday, the Senate Finance Committee will hold a hearing entitled "How U.S. International Tax Policy Impacts American Workers, Jobs, and Investment." Scheduled to testify are:
- Kimberly Clausing, Deputy Assistant Secretary (Tax Analysis), Treasury Department
- Pam Olson, Former Assistant Secretary for Tax Policy, Treasury Department
- Chye-Ching Huang, Executive Director, The Tax Law Center, New York University School of Law
- Professor James Hines Jr., University of Michigan Law School
A "white paper" discussing Senate Finance Committee Chairman Ron Wyden's (R-OR) views on the current international tax system and proposed changes is expected to be released soon after the hearing.
This hearing is anticipated to kick off the debate over potential international tax law changes, which may be considered for inclusion in the upcoming infrastructure package, as well as any other legislative vehicles this year. Observers will be looking for a number of questions to be answered:
- Does Chairman Wyden spell out in any detail legislative proposals that might be included in the pending "white paper"?
- Does Senator Sheldon Whitehouse (D-RI) use the hearing to advocate for the consideration of his recently introduced No Tax Breaks for Outsourcing Act and Stop Tax Haven Abuse Act? Do Chairman Wyden and/or Deputy Assistant Secretary Clausing (on behalf of the Biden Administration) indicate any receptivity to these bills?
- Does Deputy Assistant Secretary Clausing detail international tax proposals that will be advanced by the Biden Administration in the pending infrastructure package or included in the upcoming Treasury Department "Greenbook"?
- Will Deputy Assistant Secretary Clausing provide any further details regarding proposals that President Biden discussed on the campaign trail, such as the proposed 15 percent minimum tax on global book income or major changes to the GILTI regime?
What is said, and perhaps what is not said, at this hearing will significantly influence the international tax policy debate this year. It is imperative that interested parties monitor the hearing and consider whether there is a need to engage with policymakers in response to the hearing. #TaxTake
In The News
Marc was quoted in Law360 Tax Authority regarding a provision in the American Rescue Plan Act of 2021 prohibiting states from using federal aid "to either directly or indirectly offset a reduction in the net tax revenue" of the state. He stated the provision was "a rather blunt instrument – it arguably may prevent some state action that the Congress would be supportive of – and one that may be difficult to implement and enforce given its purported purpose."
Jorge discussed the nomination of Lily Batchelder for the role of Treasury's assistant secretary for tax policy in Bloomberg Law. He noted Batchelder's previous support for President Biden's agenda items including increasing the refundability of the Child Tax Credit and raising taxes on the wealthy. "I suspect that to carry over because that aligns well with the priorities of this administration," Jorge said.
Marc commented on the revenue raising provisions contained in the American Rescue Plan Act of 2021 in Accounting Today. He said that the provisions, including an expansion of the Section 162(m) executive compensation limitation and an extension of the excess business loss rules could be revisited in the future. "These could be further extended into the future, so to some degree, the American Rescue Plan represents a harbinger of things to come with respect to revenue-raisers," Marc stated.
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