Americans for Tax Reform Foundation will be continuing its series analyzing these proposed changes, and will provide further information on the reinsurance tax hike when more detail emerges from the Administration.
Earlier today, the U.S. Office of Management and Budget released the President’s FY2011 budget. Americans for Tax Reform has already published some initial comments, however, as Americans for Tax Reform Foundation is currently in the process of releasing a series on proposed changes to the U.S. international taxation system, it is worth specifically noting the changes proposed in this field.
Unfortunately for the U.S. economy, this Budget includes a staggering $122 billion in tax hikes on U.S. businesses competing overseas, and does nothing to address the unfair and anti-job ‘worldwide’ taxation system in place. In comparing this years proposals to last years (none of which were passed), there are two major changes. Firstly, the Administration dropped plans to abolish ‘check the box’. If enacted, this provision would have opened the floodgate to multinational companies fleeing the United States, and we welcome the Administration’s move away from such insanity. Unfortunately, the Administration has included a $519 million tax hike on reinsurance premiums. Whilst details of how this will be implemented have not been released as of yet, it is a clear indication that the Administration remains unwilling to accept the unjust and anti-jobs nature of our international tax system, nor to grapple with any of the real issues at hand.