[Congressional Record Volume 143, Number 75 (Wednesday, June 4, 1997)]
[Extensions of Remarks]
[Page E1103]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    INTRODUCTION OF THE INTERNATIONAL TAX SIMPLICATION FOR AMERICAN 
                          COMPETITIVENESS ACT

                                 ______
                                 

                           HON. AMO HOUGHTON

                              of new york

                    in the house of representatives

                        Wednesday, June 4, 1997

  Mr. HOUGHTON. Mr. Speaker, I am joined by my colleague, Mr. Levin in 
introducing legislation to simplify and reform our current 
international tax laws. As all of you know, we are in a period of 
fundamental re-examination of the Internal Revenue Code. One of the 
most complicated and impenetrable areas of the Code and most in need of 
change is the foreign area. Our international trade laws have gotten 
ahead of our tax laws for this area. We consider our bill to be a down 
payment on needed changes in this area.
  The focus of the legislation is to put some rationalization to the 
international tax area. In general, the bill seeks in modest but 
important ways to: (1) simplify this overly complex area, especially 
the foreign tax credit and the various antideferral mechanism; (2) 
encourage exports; (3) provide incentives for performance of R&D in the 
U.S.; (4) enhance U.S. competitiveness in other industrialized 
countries. And it seeks to achieve these objectives in a revenue-
conscious manner.
  For some period of time, the Committee on Ways and Means has been 
considering issues relating to international competitiveness and proper 
taxation of U.S. based multinational corporations. In 1991, the 
committee held 10 days of public hearings on the issues: international 
competitiveness including tax, trade, education, technology and other 
important issues affecting the nation's ability to compete 
internationally.
  In 1992, two former members of the Ways and Means Committee, Messrs. 
Rostenkowski and Gradison, introduced H.R. 5270. It attempted to 
address many of the same issues included in our bill. More recently, 
the Department of Treasury introduced a new tax simplification package 
which included provisions similar to those contained in our 
legislation.
  Now as we begin the process of re-examining in fundamental ways our 
income tax system, we believe it imperative to address the area of 
international taxation. In an Internal Revenue Code stuffed with eye-
glazing complexity, there is probably no area that contains as many 
difficult and complicated rules as international taxation.
  Neither one of us is under any illusion that the measure which we 
introduced removes all complexity or breaks bold new conceptual ground. 
We believe, however, that the enactment of this legislation would be a 
significant step in the right direction. The legislation would enhance 
the ability of America to continue to be the preeminent economic force 
in the world. If our economy is to continue to create jobs for its 
citizens, we must ensure that the foreign provisions of the U.S. income 
tax law do not stand in the way.
  The law as now constituted frustrates the legitimate goals and 
objectives of American business and erects artificial and unnecessary 
barriers to U.S. competitiveness. In addition, the law stands as a 
monument to the fact that the conceptual complexity of man as applied 
to the Internal Revenue Code knows no limits. Neither the largest U.S. 
based multinational companies nor the Internal Revenue Service is in a 
position to administer and interpret the mind numbing complexity of 
many of the foreign provisions. Why not then move toward creating a set 
of international tax rules which taxpayers can understand, and the 
government can administer?
  In summary, therefore the proposed changes we believe represent a 
creditable package and a down payment on further reform in the 
international tax area. We ask you to join us, in this bipartisan 
effort, by supporting our legislation.

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