WASHINGTON Feb 15 A top Republican lawmaker has
challenged the widely respected congressional forecaster on
budget issues, the Congressional Budget Office, accusing it of a
slanted report on taxing corporate profits, according to
documents released on Friday.
A 36-page January CBO report concluded that tens of billions
of dollars in new government revenue could be raised over a
decade by limiting corporations' ability to defer taxes on
foreign profits, a tax change favored by President Barack Obama.
The change, which would raise companies' tax bills, would
boost efficiency and raise about $114 billion over 10 years, CBO
The prediction didn't sit well with Dave Camp, the
Republican chairman for the U.S. House of Representatives'
tax-writing Ways and Means Committee, who backs moving to a
territorial tax system and is working on legislation to overhaul
the entire U.S. tax code.
Under the territorial approach companies could bring foreign
profits home with little or no corporate income tax imposed on a
permanent basis, not just during a temporary, one-year holiday.
In an unusual move, Camp wrote to non-partisan CBO
requesting an explanation of the report's methods, calling it
"heavily slanted and biased in favor of one particular
approach," according to a copy of the letter dated Jan. 24 and
released by Camp's office on Friday.
The Michigan lawmaker released his original letter after the
CBO released an official response on Friday.
CBO director Douglas Elmendorf said he believes the report
presents "key issues fairly and objectively and that its
findings are well grounded in economic theory and are consistent
with empirical studies in this area."
Still, the CBO director said that "because of the complexity
of the subject and the diverse views of experts in the field, we
agree that it would have been desirable to seek comments from
more outside reviewers."
One of the experts cited by CBO was a former Obama
administration official. Another academic has written critically
of corporations skirting taxes abroad.
CBO said new revenues generated by the White House's
approach would exceed new revenues available under the
territorial system, favored by many corporations.
The territorial system, as promoted by corporate lobbyists
and Republicans in Congress, would raise $76 billion over a
decade, under one estimate cited by the CBO.
(Reporting by Kim Dixon; Editing by Todd Eastham)