Legislative update: Senate Finance chair addresses tax reform, inversions

Senate Finance chair addresses tax reform, inversions

Senate Finance Committee Chairman Orrin Hatch (R-UT) today delivered a wide-ranging speech on the topics of international taxation, inversions, and tax reform.

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In today’s speech presented at a Brookings Institution conference, Corporate Inversions and Tax Policy, Chairman Hatch reiterated his view that the best way to address the issue of inversions is business tax reform. He said:


The best solution to [inversions] is, in my view, tax reform. Tax reform, if it’s done right, will help grow our economy, create jobs in the U.S. and discourage businesses from leaving our shores and invite businesses to set up and locate here. . . . I believe there is real momentum to get something done on tax reform this year, if we remain committed. And, believe me, I’m committed.


Hatch also discussed how tax reform, in his view, is to address the taxation of multinationals, expressing his preference for a territorial system:

For my part, I don’t believe in a worldwide tax system. I believe we need to go a different direction when it comes to taxing international income and move from our worldwide-leaning international tax system more toward territoriality.

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For the record, I’m no fan of inversions. . . . I see these inversions as symptomatic of a dysfunctional tax code that is taxing at too high a rate and is attempting to tax worldwide income. 

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We cannot be competitive with our current treatment of taxation of foreign-source business income and our current tax rates.

Plans for tax reform

Finally, Hatch addressed his plans for pursuing tax reform this year. He committed to introduce his own tax reform bill, and to mark it up in the Senate Finance Committee this year.

Hatch previously stated, in a Finance Committee release, that he expects the various Senate Finance tax reform working groups to report their findings to the full committee by the end of May.


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