Senate repeals U.S. export tax subsidy

Senate repeals U.S. export tax subsidy    The U.S. Senate passed a corporate tax bill Monday designed to end European Union tariff retaliation for a U.S. export subsidy that violated global trade rules.
   Critics charge that the bill became a free-for-all for pork barrel tax breaks and that the cost to the Treasury would exceed the amount of the eliminated subsidy and other corporate tax shelters.
   The World Trade Organization had authorized the EU to impose annual sanctions up to $4 billion annually until the United States eliminated its subsidy to assist exporters. The EU responded in March with tariffs on American-made products such as jewelry, iron and steel products, construction equipment, textiles and apparel, agriculture, wood products, toys, refrigeration equipment and paper products. The tariffs, started at 5 percent, and have been rising monthly and now stand at 12 percent.
   The tax bill repeals the export subsidy and replaces it with a 3 percent tax break for all U.S. manufacturers.
   The bill also includes a one-year tax deferral for multinational corporations that will tax profits at 5.25 percent instead of the normal 35 percent top corporate rate, according to Reuters. Ship builders and railroads were among industries that received tax breaks.
   The House had passed the bill. President Bush is expected to sign the bill into law.