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Representatives Philip M. Crane and Charles B. Rangel introduced legislation that would repeal the Extraterritorial Income Exclusion Act of 2000 and bring the US into compliance with WTO policies on taxation of the international operations of US companies.

William M. Thomas, Chairman of the House Ways and Means Committee, announced tax reform bill known as the "American Competitiveness Act of 2002." The bill would close loopholes which allow corporations to reduce their liability for U.S. tax.

Topics discussed at the annual conference of the US branch of the International Fiscal Association, held in Wash DC on Mar 7-8, 2002, are examined. Topics include the business profits taxation provisions in the proposed US-UK income tax treaty, the anticonduit rule in the treaty, source-basis tax planning, efforts by the IRS to improve its efficiency, international tax simplification, and US options in its dispute with the EU regarding foreign sales corporation taxation.

Issues concerning a proposal by the EU for a US tax on the sales of domestic and imported steel, in response to a US threat of a tariff on imported steel, are examined, focusing on how the steel dispute relates to possibilities for a global trade war and the dispute between the US and EU over taxation of foreign sales corporations.

Issues concerning the US relationship to the Organization for Economic Cooperation and Development's (OECD) policy on harmful tax competition are examined, focusing on US efforts to emphasize the exchange of tax information, rather than tax rates, as a means to prevent international tax evasion. Topics include efforts by the European Union to eliminating harmful tax competition, beliefs by US conservatives and liberal Black Caucus members that the tax rates of other countries should not be subject to outside interference, and a relaxation by the OECD regarding threat of sanctions to jurisdictions deemed as tax havens.

Issues related to reports issued by the Organization for Economic Cooperation and Development on Feb 14, 2001, are examined, focusing on their significance as representing the most progress the OECD has made in electronic commerce taxation since an Ottawa, Canada, conference in 1998. Topics include reports on business profits, technology, consumption tax, and Working Party No. 9 general conditions for taxation on electronic commerce.

Issues related to the importance of harmonization of tax policy among the world's countries in the new information-based economy are examined, focusing on issues discussed at a December 2000 meeting of the George Washington University Internatioanl Tax Institute. Topics include the possibility that such harmonization may reduce tax rates, IRS plans to make its pilot prefiling agreement (PFA) program permanent, the relationship between the PFA program and freedom of information, and developments in US tax treaties.

Assistant Treasury Secretary for Tax Policy Pamela F. Olson said that the Department has not taken an official position on the bill introduced by US Representatives Philip M. Crane and Charles B. Rangel to repeal the Extraterritorial Income Exclusion Act of 2000.