Connie Mack: “today Senator Breaux and I introduce a bill reaffirming that the lawmaking power is the province of the Congress, not…”

“today Senator Breaux and I introduce a bill reaffirming that the lawmaking power is the province of the Congress, not the executive branch. Our bill prohibits the Treasury Department from issuing regulations that would impose taxes on U.S. companies merely because one of their subsidiaries pays money to itself. As a general rule, U.S. corporations pay U.S. corporate income tax on the earnings of their foreign subsidiaries only when those earnings are actually distributed to the U.S. parent companies. An exception to this general rule is contained in subpart F of the Internal Revenue Code, which accelerates the income tax liability of U.S. parent companies under certain circumstances. The Treasury Department has announced, in Notice 98-35, an intention to issue regulations that will accelerate income tax liability for U.S. companies--not based on the specific circumstances enumerated in subpart F, but instead on a new ``interpretation'' of the ``policies'' that Treasury infers from that 36-year-old provision. This action crosses the line between administering the laws and making the laws, and cannot be allowed by Congress.”