Ways and Means to act on trade tax bill

Ways and Means to act on trade tax bill

WASHINGTON -- The House Ways and Means Committee plans to act on a bill Thursday that would eliminate tax measures that the World Trade Organization has ruled are illegal trade subsidies.

The bill, a companion measure to Senate-passed legislation, was introduced Friday by House Ways and Means Committee Chairman Bill Thomas, R-Calif. The Senate passed its version of the bill May 11.

The Senate spent weeks trying to finalize its version, which became a $170-billion, 10-year catch-all measure for tax incentives and provisions. The estimated cost of the House bill as introduced is $34 billion over 10 years. A similar version of the House bill passed the Ways and Means Committee in October, but would have cost nearly twice as much, about $60 billion.

Both bills replace the tariff subsidies -- the foreign sales corporations program and its successor, the extraterritorial income program -- with other corporate tax cuts intended to help U.S. manufacturers compete in foreign markets.

In retaliation for the subsidies, the European Union has implemented tariffs on hundreds of U.S. goods. The tariff rate hit 8 percent June 1.