Republicans debating remedies for corporate tax avoidanceWASHINGTON (Reuters) - President Donald Trump and Republican leaders in Congress will soon confront a complex challenge for tax reform: how to limit U.S. corporate tax avoidance schemes that take advantage of low tax rates in foreign countries. Congressional and administration staff have begun to examine options to address profit-shifting schemes that include so-called transfer pricing, earnings stripping and tax inversions.  A decision on how to handle these in tax legislation could come before Congress leaves town for its one-week July 4 recess on June 29, officials and lobbyists said. Lawmakers say the current tax code incentivizes profit shifting overseas because of the high 35 percent U.S. corporate income tax rate and rules that allow companies to hold profits abroad tax free until returned to U.S. soil. Without effective measures against tax avoidance, experts and lobbyists said tax legislation could trigger a new exodus of income and assets abroad. Because Trump and Republicans in Congress also want to end U.S. taxes on foreign earnings, companies could eliminate their U.S. tax bills altogether without restrictions.   Tax reduction strategies have been employed for decades by companies including Microsoft Corp (MSFT.O), Apple Inc (AAPL.O) and Amazon.com Inc (AMZN.O). Independent analysts estimate the federal government misses out on more than $100 billion a year in corporate tax revenues as a result of tax reduction maneuvers. That is equal to one-third of the $300 billion in annual corporate tax revenues. Many schemes seek lower corporate tax bills through “transfer pricing” - using transactions between business units to shift income abroad. The shift often coincides with the transfer of intangible assets such as intellectual property to low-tax nations where companies can expect single-digit tax rates.   Last week, Senate Finance Committee Democrats asked Treasury Secretary Steven Mnuchin to leave in place regulations adopted under President Barack Obama to combat earnings stripping and tax inversions. Companies use earnings stripping to shift income abroad as tax-deductible interest payments to foreign affiliates. Inversions are international mergers in which U.S. companies move their headquarters to foreign countries with low taxes, if only on paper, to lower their U.S. tax bills. Companies have accumulated some $2.6 trillion in abroad, equivalent to more than three-quarters of the $3.3 trillion in annual government receipts expected this year. BORDER-ADJUSTMENT TAX But the most effective measures against corporate tax avoidance schemes, including House Speaker Paul Ryan’s controversial border-adjustment tax, or BAT, have proved unpopular, raising the possibility that tax legislation could simply cut the corporate tax rate to 15 percent to reduce the advantages offered by foreign tax havens. Aside from BAT, which taxes imports but not exports, tax reform discussions are also looking at a minimum tax on profits from tax havens, a tax on intangible income and other measures to discourage companies from shifting profits to low-tax countries where they do little actual business, according to aides and lobbyists. Lobbyists said none of the options have enjoyed consensus support in Congress. Meanwhile, the idea of a simple rate cut does not sit well with House Republican leaders.   “Even with a low rate, we’ll continue to see U.S. jobs and research and headquarters move overseas,” said House Ways and Means Committee Chairman Kevin Brady, a leading BAT proponent. Experts warn that the 15 percent rate sought by Trump is well above a 5 percent effective rate that some corporations pay in countries like Ireland, the Netherlands and Luxembourg. Brady and Ryan are expected to address the issue in coming weeks with Mnuchin, White House economic adviser Gary Cohn, Senate Republican leader Mitch McConnell and Senate Finance Committee Chairman Orrin Hatch. The six are trying to forge legislation that could be unveiled as early as September. Trump has pledged the biggest tax overhaul since Ronald Reagan. But Republican infighting over healthcare has delayed the timetable. politicsNews
republicans debating remedies corporate tax avoidancewashington reuters president donald trump republican leaders congress soon confront complex challenge tax reform limit corporate tax avoidance schemes take advantage low tax rates foreign countries congressional administration staff begun examine options address schemes include transfer pricing earnings stripping tax inversions a decision handle tax legislation could come congress leaves town july recess june officials lobbyists said lawmakers say current tax code incentives profit shifting overseas high percent corporate income tax rate rules allow companies hold profits abroad tax free returned soil without effective measures tax avoidance experts lobbyists said tax legislation could trigger new exodus income assets abroad because trump republicans congress also want end taxes foreign earnings companies could eliminate tax bills altogether without restrictions tax reduction strategies employed decades companies including microsoft corp apple inc inc independent analysts estimate federal government misses billion year corporate tax revenues result tax reduction maneuvers that equal billion annual corporate tax revenues many schemes seek lower corporate tax bills transfer pricing using transactions business units shift income abroad the shift often coincides transfer intangible assets intellectual property nations companies expect tax rates last week senate finance committee democrats asked treasury secretary steven mnuchin leave place regulations adopted president barack obama combat earnings stripping tax inversions companies use earnings stripping shift income abroad interest payments foreign affiliates inversions international mergers companies move headquarters foreign countries low taxes paper lower tax bills companies accumulated trillion abroad equivalent trillion annual government receipts expected year tax but effective measures corporate tax avoidance schemes including house speaker paul ryan controversial tax bat proved unpopular raising possibility tax legislation could simply cut corporate tax rate percent reduce advantages offered foreign tax havens aside bat taxes imports exports tax reform discussions also looking minimum tax profits tax havens tax intangible income measures discourage companies shifting profits countries little actual business according aides lobbyists lobbyists said none options enjoyed consensus support congress meanwhile idea simple rate cut sit well house republican leaders even low rate continue see jobs research headquarters move overseas said house ways means committee chairman kevin brady leading bat proponent experts warn percent rate sought trump well percent effective rate corporations pay countries like ireland netherlands luxembourg brady ryan expected address issue coming weeks mnuchin white house economic adviser gary con senate republican leader mitch mcconnell senate finance committee chairman train hatch the six trying forge legislation could unveiled early september trump pledged biggest tax overhaul since ronald reagan but republican infighting healthcare delayed timetable politicsnews
Your task is to classify the provided input as real or fake news. Label 0 is meant for fake news, Label 1 is for real news. TEXT: Republicans debating remedies for corporate tax avoidanceWASHINGTON (Reuters) - President Donald Trump and Republican leaders in Congress will soon confront a complex challenge for tax reform: how to limit U.S. corporate tax avoidance schemes that take advantage of low tax rates in foreign countries. Congressional and administration staff have begun to examine options to address profit-shifting schemes that include so-called transfer pricing, earnings stripping and tax inversions.  A decision on how to handle these in tax legislation could come before Congress leaves town for its one-week July 4 recess on June 29, officials and lobbyists said. Lawmakers say the current tax code incentivizes profit shifting overseas because of the high 35 percent U.S. corporate income tax rate and rules that allow companies to hold profits abroad tax free until returned to U.S. soil. Without effective measures against tax avoidance, experts and lobbyists said tax legislation could trigger a new exodus of income and assets abroad. Because Trump and Republicans in Congress also want to end U.S. taxes on foreign earnings, companies could eliminate their U.S. tax bills altogether without restrictions.   Tax reduction strategies have been employed for decades by companies including Microsoft Corp (MSFT.O), Apple Inc (AAPL.O) and Amazon.com Inc (AMZN.O). Independent analysts estimate the federal government misses out on more than $100 billion a year in corporate tax revenues as a result of tax reduction maneuvers. That is equal to one-third of the $300 billion in annual corporate tax revenues. Many schemes seek lower corporate tax bills through “transfer pricing” - using transactions between business units to shift income abroad. The shift often coincides with the transfer of intangible assets such as intellectual property to low-tax nations where companies can expect single-digit tax rates.   Last week, Senate Finance Committee Democrats asked Treasury Secretary Steven Mnuchin to leave in place regulations adopted under President Barack Obama to combat earnings stripping and tax inversions. Companies use earnings stripping to shift income abroad as tax-deductible interest payments to foreign affiliates. Inversions are international mergers in which U.S. companies move their headquarters to foreign countries with low taxes, if only on paper, to lower their U.S. tax bills. Companies have accumulated some $2.6 trillion in abroad, equivalent to more than three-quarters of the $3.3 trillion in annual government receipts expected this year. BORDER-ADJUSTMENT TAX But the most effective measures against corporate tax avoidance schemes, including House Speaker Paul Ryan’s controversial border-adjustment tax, or BAT, have proved unpopular, raising the possibility that tax legislation could simply cut the corporate tax rate to 15 percent to reduce the advantages offered by foreign tax havens. Aside from BAT, which taxes imports but not exports, tax reform discussions are also looking at a minimum tax on profits from tax havens, a tax on intangible income and other measures to discourage companies from shifting profits to low-tax countries where they do little actual business, according to aides and lobbyists. Lobbyists said none of the options have enjoyed consensus support in Congress. Meanwhile, the idea of a simple rate cut does not sit well with House Republican leaders.   “Even with a low rate, we’ll continue to see U.S. jobs and research and headquarters move overseas,” said House Ways and Means Committee Chairman Kevin Brady, a leading BAT proponent. Experts warn that the 15 percent rate sought by Trump is well above a 5 percent effective rate that some corporations pay in countries like Ireland, the Netherlands and Luxembourg. Brady and Ryan are expected to address the issue in coming weeks with Mnuchin, White House economic adviser Gary Cohn, Senate Republican leader Mitch McConnell and Senate Finance Committee Chairman Orrin Hatch. The six are trying to forge legislation that could be unveiled as early as September. Trump has pledged the biggest tax overhaul since Ronald Reagan. But Republican infighting over healthcare has delayed the timetable. politicsNews
Your task is to classify the provided input as real or fake news. Label 0 is meant for fake news, Label 1 is for real news. TEXT: republicans debating remedies corporate tax avoidancewashington reuters president donald trump republican leaders congress soon confront complex challenge tax reform limit corporate tax avoidance schemes take advantage low tax rates foreign countries congressional administration staff begun examine options address schemes include transfer pricing earnings stripping tax inversions a decision handle tax legislation could come congress leaves town july recess june officials lobbyists said lawmakers say current tax code incentives profit shifting overseas high percent corporate income tax rate rules allow companies hold profits abroad tax free returned soil without effective measures tax avoidance experts lobbyists said tax legislation could trigger new exodus income assets abroad because trump republicans congress also want end taxes foreign earnings companies could eliminate tax bills altogether without restrictions tax reduction strategies employed decades companies including microsoft corp apple inc inc independent analysts estimate federal government misses billion year corporate tax revenues result tax reduction maneuvers that equal billion annual corporate tax revenues many schemes seek lower corporate tax bills transfer pricing using transactions business units shift income abroad the shift often coincides transfer intangible assets intellectual property nations companies expect tax rates last week senate finance committee democrats asked treasury secretary steven mnuchin leave place regulations adopted president barack obama combat earnings stripping tax inversions companies use earnings stripping shift income abroad interest payments foreign affiliates inversions international mergers companies move headquarters foreign countries low taxes paper lower tax bills companies accumulated trillion abroad equivalent trillion annual government receipts expected year tax but effective measures corporate tax avoidance schemes including house speaker paul ryan controversial tax bat proved unpopular raising possibility tax legislation could simply cut corporate tax rate percent reduce advantages offered foreign tax havens aside bat taxes imports exports tax reform discussions also looking minimum tax profits tax havens tax intangible income measures discourage companies shifting profits countries little actual business according aides lobbyists lobbyists said none options enjoyed consensus support congress meanwhile idea simple rate cut sit well house republican leaders even low rate continue see jobs research headquarters move overseas said house ways means committee chairman kevin brady leading bat proponent experts warn percent rate sought trump well percent effective rate corporations pay countries like ireland netherlands luxembourg brady ryan expected address issue coming weeks mnuchin white house economic adviser gary con senate republican leader mitch mcconnell senate finance committee chairman train hatch the six trying forge legislation could unveiled early september trump pledged biggest tax overhaul since ronald reagan but republican infighting healthcare delayed timetable politicsnews