Bradley Proposes $125 Billion in Corporate Tax Increases

Monday, January 10, 2000

Deloitte & Touche OnLine

Democratic presidential candidate Bill Bradley January 4 introduced a proposal to raise taxes by $125 billion over 10 years by shutting down corporate tax shelters and eliminating "corporate loopholes."

The proposal takes aim at a now familiar target, corporate tax shelters. Last year, the Clinton Administration’s budget proposal for fiscal 2000 included 12 new tax measures directed at corporate tax shelters. The proposals stalled because congressional leaders were reluctant to pass legislation that business leaders argued could interfere with legitimate business transactions. In addition, several members of the tax-writing committees were reluctant to further expand the authority of the IRS and Treasury to attack perceived abuses when the agencies had failed to vigorously exercise the authority granted to them under current law to fix the problems.

• Increasing the penalties on companies engaged in tax-avoidance transactions and on the accountants and lawyers who promote them;
• Increasing audits of large corporations; and
• Banning the use of contingency fee arrangements for rendering federal tax advice.
  
  

• Reducing the subsidy for hardrock mining companies that mine public land.
• Not permitting oil and gas producers, as well as hardrock mining companies, to take an up-front tax deduction for exploration and development costs.
• Not allowing ranchers to graze livestock on federal land at a reduced cost.
• Repealing the alternative minimum tax cut for oil and gas operator’s intangible costs, and the credit enhanced oil recovery costs.
• Imposing superfund taxes on those chemical companies.
• Repealing a provision in the 1997 budget that makes it easier for a company to "park" profits in foreign subsidiaries.

Bradley’s proposal is not unique. The corporate community has become a favorite source of revenue proposals for politicians who are looking for ways to fund their projects. Recent history has shown, however, that such proposals are often rejected or slimmed down as they make their way through the legislative process.  

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