WASHINGTON, D.C. - House Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.) issued the following statement in response to legislation introduced by Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) to prevent financial services businesses from avoiding the corporate income tax through publicly traded partnerships:
“I applaud Senators Baucus and Grassley for taking on this very serious issue. It is an issue with substantial implications for the viability of our corporate income tax system and the structure of our investment banking industry. We should not permit one segment of the financial services industry to enjoy a competitive advantage over others.
“The Ways and Means Committee intends to follow the legislation in the Senate with its own thorough examination of these issues. Together, our actions should put everyone on notice that Congress may act to address these outstanding issues. It should be noted that, due to the potential erosion of our tax revenues in this case, my historic opposition to retroactive tax legislation may not apply."
Congress has sharply restricted the ability to use publicly traded partnerships to avoid the corporate income tax. It restricted publicly traded partnerships to a limited number of businesses where this form of ownership was traditional. It did not intend to give businesses in the financial services industry an exemption from these rules.
