[Congressional Record (Bound Edition), Volume 146 (2000), Part 17]
[Extensions of Remarks]
[Page 25382]
[From the U.S. Government Publishing Office, www.gpo.gov]


[[Page 25382]]

    WAIVING POINTS OF ORDER AGAINST CONFERENCE REPORT ON H.R. 2614, 
     CERTIFIED DEVELOPMENT COMPANY PROGRAM IMPROVEMENTS ACT OF 2000

                                 ______
                                 

                               speech of

                          HON. PHILIP M. CRANE

                              of illinois

                    in the house of representatives

                       Thursday, October 26, 2000

  Mr. CRANE. Mr. Speaker, the tax bill before us today is a mix of 
modest, but important policy changes, some unfortunate new directions 
in tax policy, and what can best be termed ``housekeeping'' items.
  There is, however, one especially important provision in this bill, 
which is the Extraterritorial Income Exclusion, or EIE, also known as 
the Foreign Sales Corporation replacement. This provision, necessitated 
by actions taken by the European Union before the World Trade 
Organization, is essential to preserving the ability to compete 
effectively of U.S. companies and U.S. workers.
  If we are to succeed and thrive in international commerce, we must 
not impose punitive taxes on our own competitors. Absent the EIE, our 
tax code would do just that.
  We must be clear about this, however. While we believe our new system 
will be found to be WTO compliant, there are no assurances. And we will 
not know for some months.
  I want to assure both our friends of the European Union, and our 
companies that are looking to the Congress to resolve this 
satisfactorily, that if our new system is found wanting, then the next 
Congress and the next Administration will work quickly to find another.
  If the EIE regime is found wanting, there may be no alternative but 
to adopt a fully territorial tax regime. That means, in short, a U.S. 
tax system that only collects tax on income earned in the U.S. I, for 
one, would welcome this, as should all U.S. companies and their 
workers, because this would cause a dramatic improvement in their 
ability to compete internationally. It would be ironic, indeed, if the 
net result of the Europeans' complaint is to leave U.S. companies 
stronger internationally than they were before.
  For now, however, I hope the Congress passes this bill, with its FSC 
replacement. I hope the President signs it. And I hope the WTO finds 
the new system satisfactory, so we can provide some certainty to our 
companies as to the tax law. We can then consider at a later date 
whether, when, or how to enact a territorial system.

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