The Congressional Budget Office says it should have sought more outside voices to look at a Jan. 8 report on international tax policy options.
The nonpartisan agency responded today to concerns raised by Rep. Dave Camp, chairman of the House Ways and Means Committee, who favors a so-called territorial tax system that would exempt most income earned outside the U.S. from U.S. taxes.
“We continue to believe that it presents the key issues fairly and objectively and that its findings are well grounded in economic theory and are consistent
with empirical studies in this area,” Douglas Elmendorf, the CBO director, wrote in a letter today. “Nevertheless, because of the complexity of the subject and the diverse views of experts in the field, we agree that it would have been desirable to seek comments from more outside reviewers.”
The study came as legislators continue to explore ways to overhaul the tax code and address the system that has led companies to stockpile more than $1 trillion in untaxed profits outside the U.S.
The dispute between Camp and CBO follows a similar spat between Senate Republicans and the Congressional Research Service over a report on the economic consequences of tax rates on top earners. In that case, Democrats said Republicans were trying to politicize a nonpartisan agency’s study.
In his Jan. 24 letter to Elmendorf, Camp, a Republican from Michigan, wrote the study was “heavily slanted and biased in favor of one specific approach,” the idea that there should be no tax difference for U.S. companies choosing between domestic and international investments.
The report, Camp wrote, failed to “provide an equal and balanced review of proposals on territorial taxation.”
In his response, Elmendorf defended the study and the options it considered.