WASHINGTON DC - Select Revenue Measures Subcommittee Chairman Richard Neal (D-MA) issued the following opening statement during today’s subcommittee hearing on reinsurance:
“I call this hearing to order. Please take your seats.
“I want to welcome our guests today to this hearing to discuss the taxation of related party reinsurance.
“This hearing is to explore whether there are any actual disadvantages between domestic and foreign companies, to quantify such problem if so, and to discuss proposals to address that.
“Joint Tax tells us that there has been significant growth in U.S. premiums sent offshore for reinsurance, but particularly so for those sent to related parties.
“Ten years ago, when this was a mere trickle offshore, Mrs. Johnson and I had a very different legislative approach than the one I have offered this Congress. Now, after a decade of migration offshore, we are still debating the problem and how to address it. Part of the problem is the complexity of taxing insurance. There is no easy solution, but I believe it is a discussion worth having. And as we will hear from Treasury today, I am certainly open to other options in furtherance of this shared goal.
“To say this issue has spawned a furious lobbying campaign would be to put it mildly - you can watch the competing videos on You Tube. This hearing will formally air many of those views, although perhaps in a less entertaining way.
“As many of you know, I have long been a crusader against tax havens. I have no doubt that moving almost any industry to a tax haven would result in lower prices for goods or services produced there. We need to ensure whatever we do is right for taxpayers, consumers, and the treasury. A debate about a competitive corporate tax rate is one I’m ready to engage in; but a zero rate is a non-starter.
“I also believe we need a fair and open debate, as has been the practice of this Subcommittee and the hearings that Mr. Tiberi and I have conducted over the last year and a half. I regret that seven (7) of my invitations to the CEO’s of foreign reinsurers and two (2) to reinsurance trade groups to testify today were politely declined. They instead have pointed to a report analyzing the trade aspects of the proposals we will be debating today.
“Although this Subcommittee is concerned primarily with tax issues, I will make that report, and a report arguing exactly the opposite point of view on trade issues, part of the Record of this hearing." #
