Sometimes an issue seemingly buried underground by other events will surface suddenly and grab attention. So it is with the business transfer taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. (BTT) now making waves in the Senate and elsewhere. Nobody was talking about this a year ago when Treasury I seemed to consign such a tax system at the Federal level to the bottom rung of priorities. Lo and behold, it’s alive and kicking again. A business transfer tax could serve several purposes, including a whole new look of tax reform, relief from income taxation, help with the wade deficit, reduction of the budget deficit and as an alternative to the minimum tax–which is exactly why it is getting attention. These purposes, however, may not be all consistent.
Senator William Roth (R-Del.) a senior member of the Senate Finance Committee, has proposed two versions of the business transfer tax. Both would levy a Federal tax on net receipts of domestic business. The cost of raw materials and capital expenditures would be subtracted from gross receipts to obtain this base . Such a tax would be, in fact, a “consumption-based” value-added tax. Because of political misfortune associated with the value-added tax name, it isn’t being called that. It’s doubtful that many are being fooled, however.Share