The House Ways and Means Committee today held a hearing on tax reform issues related to US international tax rules and tax havens, base erosion, and profit shifting. The hearing also discussed approaches for reforming US domestic tax rules through rate reduction and base broadening. In addition, the hearing examined OECD initiatives that seek to address concerns over transfer pricing, the tax treatment of intangible property, and related issues as part of an action plan addressing base erosion and profit shifting (BEPS).
In his opening statement, Ways and Means Chairman Dave Camp (R-MI) noted the extensive feedback received from stakeholders – taxpayers, practitioners, economists, and members of the general public – on the international tax reform discussion draft released in late 2011, which included proposal to move the United States from a worldwide taxation system to a participation exemption system similar to those used by most OECD nations. Chairman Camp cited a “universal observation” that the United States “has the highest corporate rate in the developed world along with an outdated international tax system” that is a “barrier” to economic growth and the competitiveness of US companies, along with comments that any reform legislation “must protect against erosion of the US tax base through the shifting of profits to low-tax jurisdictions.”