Tax Treaty Loophole Closer Will Not Be in Senate Farm Bill, Baucus Says

Tax Treaty Loophole Closer Will Not Be in Senate Farm Bill, Baucus Says

Posted Aug. 1, 2007, 2:40 PM ET

Senate Finance Committee Chairman Max Baucus (D-Mont.) told reporters Aug. 1 that the Senate's version of a farm reauthorization bill will not include the same tax treaty "loophole closers" used in the House bill (H.R. 2419).

Baucus said he has spoken to Senate Agriculture Committee Chairman Tom Harkin (D-Iowa) about it, and said it would not be a good addition to the bill. Baucus said he would consider other types of offsets, but did not suggest new types of revenue-raisers that could be used in the bill.

House Democrats added the tax changes to the House's Farm, Nutrition, and Bioenergy Act of 2007 to raise an additional $4 billion over five years to help offset increased spending on the food stamp program. The change would amend tax code Section 894 to require U.S. subsidiaries of foreign companies to pay the higher of the withholding rates between a payment made directly to the parent foreign corporation, or a payment made to the subsidiary in a country with a tax treaty with the United States.