Tax Treaty Legislation in the 110th Congress (CRS Report for Congress)
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| Release Date |
Revised May 22, 2008 |
| Report Number |
RL34245 |
| Report Type |
Report |
| Authors |
Donald J. Marples, Government and Finance Division |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
On July 27, 2007, the House of Representatives approved H.R. 2419, anomnibus farm bill. The bill's spending provisions exceeded the budget baseline foragriculture, and to comply with House pay-as-you-go budget rules, the bill includedseveral revenue-raising tax provisions. In terms of revenue impact, by far the largesttax measure is a proposal to restrict in certain cases the use of tax-treaty benefits byforeign firms with operations in the United States. The Joint Tax Committee hasestimated that the provision would raise an estimated $3.2 billion over 5 years and$7.5 billion over 10 years. On October 25, Chairman Charles Rangel of the HouseWays and Means Committee introduced H.R. 3970, an omnibus tax bill entitled theTax Reduction and Reform Act. Among its many provisions, the bill includes a taxtreatyproposal similar to that of H.R. 2419, but modified to reduce the possibility ofconflict with existing tax treaties. Preliminary revenue estimates are thus somewhatsmaller than for H.R. 2419: a revenue gain of $2.7 billion over 5 years and $6.4billion over 10 years. Compared to several other revenue-raising items in H.R. 3970,the provision is moderate in size. In the context of H.R. 2419, the provision islikewise moderate, with its five-year revenue impact amounting to 8% of the bill'sincreased outlays.
