U.S. LEGISLATURE Corporate tax reforms advance

The bill would bring the most sweeping changes since 1986.
WASHINGTON (AP) -- The Senate is expected to follow the lead of the House and pass a major overhaul of corporate tax law that would dole out $136 billion in new tax breaks to a wide array of U.S. companies and provide a $10.1 billion buyout for the nation's tobacco farmers.
But Senate approval may not come until supporters of more regulation of tobacco express their unhappiness that this provision was stripped from the bill.
The House approved the corporate tax bill by a lopsided 280-141 vote late Thursday night with 73 Democrats joining 207 Republicans in support of the measure.
After the vote, Senate Majority Leader Bill Frist, R-Tenn., announced the Senate would take up the tax bill before lawmakers adjourn for the upcoming elections.
The timing could be determined by whether senators who support regulation of tobacco by the Food and Drug Administration carry through with threats to stage a filibuster. They are unhappy that the FDA regulation, which passed the Senate, was stripped out of the final bill by a House-Senate conference committee which did retain the buyout for farmers' Depression-era quotas.
The tax legislation represents the most sweeping rewrite of corporate tax law since the last major overhaul of the tax code in 1986.
Tax relief
The centerpiece of the legislation would provide $76.5 billion in tax relief for the country's beleaguered manufacturing sector and other U.S. "producers" -- broadly defined to include construction companies, architects, engineering firms, film and music companies and oil and gas companies.
Government watchdog groups said that expanded definition of manufacturing companies was just one example of what was wrong with a bill that they contend was stuffed full of tax breaks by lawmakers anxious to curry favor with different groups right before an election.
But House Ways and Means Chairman Bill Thomas, R-Calif., argued that the legislation was urgently needed to end sanctions on U.S. products exported to Europe and provide tax relief that will create jobs.
The bill would repeal a $5 billion annual tax break provided to American exporters that was ruled illegal by the World Trade Organization. Ending the tax break is needed to lift retaliatory tariffs that have been imposed on U.S. exports to Europe.
The bill replaces the export tax break with $136 billion in new tax breaks over the next decade for a wide array of groups. The bill would provide tax benefits to farmers, fishermen who purchase tackle boxes and sonar fish-finding equipment and bow-and-arrow hunters.
Tax help would also be provided to NASCAR race track owners, Native Alaskan whale hunters and importers of Chinese ceiling fans.
Opponents also objected to $42.6 billion in tax relief for multinational corporations, which they contended would increase the movement of U.S. jobs overseas.