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CONGRESS MISSES DEADLINE, EU SANCTIONS KICK IN

March 01, 2004

The European Union imposed long-threatened trade sanctions today in reaction to the failure of Congress to repeal the "extraterritorial income exclusion" (ETI).

The sanctions are designed to inflict hurt on politically-sensitive areas of the economy in an election year.

The ETI allows taxpayers to exclude a portion of their income related to exported manufactured goods. The need to repeal the tax break has been apparent since 2001, when the WTO declared the ETI exclusion an illegal export subsidy.

Well, if the country faces punishment for its export sins, American taxpayers should at least enjoy the sinning. Learn more about how you can use this "illegal" trade subsidy here - remember, while it's illegal under international trade rules, it's perfectly legal under the tax law!

Prior coverage of the ETI repeal controversy:

WAYS AND MEANS CHALLENGES SENATE ON TRADE TAX BILL

GRASSLEY PROPOSES MANUFACTURING, AG SPECIAL DEDUCTION

C CORPORATION RATE CUTS ON THE WAY?

A PDF file listing the goods subject to sanctions is here.

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