House Republican tax writers effectively gutted a proposal to tax U.S. companies' payments to related foreign affiliates, part of a package of late changes on Monday that punched a $74 billion revenue hole in their tax overhaul plan, according to a preliminary estimate from Congress's Joint Committee on Taxation.
The change leaves House Ways and Means Chairman Kevin Brady searching for new ways to offset the bill's tax cuts in order to keep the legislation in line with Congress's 2018 budget resolution and avoid the threat of a Democratic filibuster in the Senate that could kill it.
The panel voted late Monday to approve a group of changes that Brady said "better tailors" provisions aimed at preventing companies from shifting their earnings offshore to avoid U.S. taxes. As a result, the revenue from a proposed 20% excise tax on certain corporate payments to related offshore affiliates dropped to about $6.5 billion from $154.5 billion earlier, the JCT found.
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