Pam Olson Warns US Lawmakers To Tread Carefully Over Corporate Tax Changes

21 October 2002 Speaking to a Senate hearing last week, Pam Olson warned legislators not to act too hastily against companies which relocate offshore for tax purposes, arguing that the flaws in the US tax code which drive them to expatriate need to be addressed first.

Ms Olson, the newly appointed Assistant Treasury Secretary for Tax Policy, cautioned that closing 'loopholes' in the US corporate tax regime too quickly 'may inadvertently result in a tax code favouring the acquisition of US operations by foreign corporations'.

She told the Senate hearing: 'We must address the tax disadvantages imposed by our international tax rules on US-based companies with foreign operations,' explaining that:

'Relative to the tax systems of our major trading partners, the US tax rules can impose significantly heavier burdens on the foreign operations of domestically-based companies. Our objective must be to ensure that the US tax system maintains the competitiveness of US businesses in the global market place.'

Meanwhile, the AFP news agency quoted Senate Majority Leader, Tom Daschle as observing last week that the impetus behind legislation to cut companies which perform corporate inversions off from the financial benefits afforded by such moves has decreased somewhat, because: 'special interests convinced the Republican leadership they would not tolerate' such a bill.