The House and Senate continue to move forward on a substantial corporate tax bill. The Foreign Sales Corporation and Extraterritorial Income Exclusion (FSC/ETI) bill is designed to remove certain corporate tax subsidies that were ruled illegal by the World Trade Organization. Repealing the subsidies would increase federal revenue by approximately $50 billion over the next 10 years. (The bill is currently in conference. See a summary of the differences between the House and Senate version.)

Washington, DC, Sept. 22, 2004--The result of recent tax policy choices is that the 2004 deficit has reached an all-time high of $422 billion dollars. The Congressional Budget Office reported this month that only 11% of the FY 2004 deficit was due to cyclical factors, while 89% of the deficit was result of federal policy decisions. Not only is the current deficit the highest it has ever been in dollar terms, but in a recent analysis, OMB Watch Staff Economist John Irons projected that the deficit will reach $5.5 trillion over the next ten years. In addition, a new study released today by the Institute on Taxation and Economic Policy (ITEP) finds that many of the country’s biggest corporations are not paying their fair share of federal income taxes.