Ending tax breaks eyed as way to ease budget cuts
By STEPHEN OHLEMACHER
November 14, 2013 3:54PM
WASHINGTON (AP) — Democrats’ new mantra in budget talks is to close tax loopholes for certain businesses, investors and professionals as a way to raise more revenue to help ease autopilot spending cuts that soon are to become more painful.
Sen. Patty Murray, D-Wash., the Senate Budget Committee chairwoman, targeted two tax breaks in an op-ed article she wrote that appeared in The Washington Post last weekend: deductions for corporations that pay executives in stock options and a break that allows American corporations to avoid U.S. taxes on the profits of foreign subsidiaries.
Sen. Patty Murray, D-Wash. mentioned U.S.-based corporations who avoid paying taxes on the profits of some foreign subsidiaries by classifying them as separate entities on tax forms. Limiting the tax break, which has been dubbed “check-the-box,” would raise up to $80 billion over the next decade.—U.S. companies in general don’t have to pay U.S. taxes on foreign earnings until they bring those earnings back to the U.S. However, U.S.-based corporations can finance expansion of overseas operations with debt, and then deduct the interest on that debt before reporting any foreign income for tax purposes. Obama’s 2014 budget request proposes to raise $36 billion over the next decade by limiting this tax break. Democratic congressional aides estimate they can raise $50 billion.MORE: Ending tax breaks eyed as way to ease budget cuts
WASHINGTON (AP) — Democrats’ new mantra in budget talks is to close tax loopholes for certain businesses, investors and professionals as a way to raise more revenue to help ease autopilot spending cuts that soon are to become more painful.
Sen. Patty Murray, D-Wash., the Senate Budget Committee chairwoman, targeted two tax breaks in an op-ed article she wrote that appeared in The Washington Post last weekend: deductions for corporations that pay executives in stock options and a break that allows American corporations to avoid U.S. taxes on the profits of foreign subsidiaries.
Sen. Patty Murray, D-Wash. mentioned U.S.-based corporations who avoid paying taxes on the profits of some foreign subsidiaries by classifying them as separate entities on tax forms. Limiting the tax break, which has been dubbed “check-the-box,” would raise up to $80 billion over the next decade.—U.S. companies in general don’t have to pay U.S. taxes on foreign earnings until they bring those earnings back to the U.S. However, U.S.-based corporations can finance expansion of overseas operations with debt, and then deduct the interest on that debt before reporting any foreign income for tax purposes. Obama’s 2014 budget request proposes to raise $36 billion over the next decade by limiting this tax break. Democratic congressional aides estimate they can raise $50 billion.MORE: Ending tax breaks eyed as way to ease budget cuts
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