Letter Opposing H.R. 4351, the "AMT Relief Act of 2007"
December 12, 2007
TO THE MEMBERS OF THE U.S. HOUSE OF REPRESENTATIVES:
The U.S. Chamber of Commerce, the world's largest business federation representing more than three million businesses and organizations of every size, sector, and region, urges you to oppose H.R. 4351, the "AMT Relief Act of 2007." We feel it is inappropriate to offset relief from the alternative minimum tax (AMT), a tax never designed nor intended to be a revenue raiser, with new, onerous, and permanent taxes on employees, American businesses, and the economy.
The Chamber opposes the nonqualified deferred compensation provisions of H.R. 4351. The deferred plans used by offshore partnerships are created as part of complex legal agreements between managers and limited partners who are usually passive foreign investors.
Foreign investors utilize these deferral arrangements to better align the interests of the manager with the investors. Altering these economic arrangements could cause these investments to migrate to other countries.
The Chamber opposes a delay in the implementation of the interest allocation rules enacted by the American Jobs Creation Act of 2004 because of the adverse effect that delay has on U.S. competitiveness in global markets. Delaying implementation of these rules effectively rewrites tax law changes that reformed rules widely recognized as anti-competitive and harmful to U.S. businesses with foreign operations.
Finally, the Chamber has long-opposed the codification of the judicially-developed economic substance doctrine. Codifying the economic substance doctrine would transform a long-standing doctrine in such a way that previously legitimate business transactions could be deemed abusive. Moreover, because of the vague and subjective nature of the economic substance doctrine, the provision of this bill, would, as a practical matter, be unworkable. The Chamber believes effective administration and enforcement of the tax code is a much better alternative than a legislative change.
Due to the inclusion of those revenue raising provisions, the Chamber strongly opposes H.R. 4351 and may consider votes on, or in relation to, this issue in our annual How They Voted scorecard.
R. Bruce Josten