Whether John McCain or Barack Obama becomes the country’s next chief executive, they will need to look not only at tax reform, but international tax reform early in their administration.“We may find it wise to get to [international] tax reform very early,” advised Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, during recent Capitol Hill hearings on the issue.

The way the United States taxes the foreign income of U.S. businesses is outdated and not responsive to a global economy, Baucus contends: “In the 1960s — the decade during which many of our current tax rules regarding cross-border activities and investment were first enacted — international trade and investment flows were much less important than they are today.”

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