WASHINGTON-Two key Senate lawmakers Thursday introduced legislation to repeal a tax break enjoyed by U.S. exporters-including those in the telecom and high-tech sectors-that the World Trade Organization said violate global commerce rules.
The bill, cosponsored by Senate Finance Committee Chairman Charles Grassley (R-Iowa) and ranking member Max Baucus (D-Mont.), would use revenue from the repeal to fund a new tax cut for American manufacturers.
The United States is under pressure to eliminate the illegal tax credit to avoid $4 billion in retaliatory trade tariffs by the European Union.
Companies like Motorola Inc. and Microsoft Inc., which have benefited from the extraterritorial income exclusion, are apt to back the Grassley-Baucus bill because it strongly resembles a House bill-written by Reps. Philip Crane (R-Ill.) and Charles Rangel (D-N.Y.)-that the two companies already support.
Other telecom and high-tech companies have lined up behind another House manufacturing tax-cut bill penned by Ways and Means Committee Chairman William Thomas (R-Calif.).
