Review for the Ratification of the United States-United Kingdom Tax Treaty

B-115398.53: Published: Jan 25, 1979. Publicly Released: Jan 25, 1979.

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The Senate is presently considering a tax treaty with the United Kingdom which concerns American tax practices effecting multinational companies. The issue was raised as to whether the Senate alone may ratify a treaty affecting federal revenues, which is a power granted to the House of Representatives by the Constitution. The Constitution states, " All bills for raising revenue shall originate in the House of Representatives." The House Committee on Foreign Affairs stated that the phrase, "all bills for raising revenue," does not embrace treaties; a treaty is not a bill for raising revenue and the requirement is not a limitation upon the treatymaking power, but is only a condition imposed on the ordinary lawmaking power of the government. A Senate Committee on Foreign Relations report states that the Tax Treaty with the United Kingdom will have an impact on U.S. tax revenues. Nevertheless, the Treaty neither establishes new taxes nor does it require appropriations or require implementing new legislation. This interpretation would allow passage of the Treaty without infringing on the Constitutional authority of the House of Representatives. A federal law passed in 1974 corroborates this view by allowing bills involving federal revenues to be introduced by both the House and the Senate. Based on the GAO review, therefore, the Senate's advice and consent to the Tax Treaty ratification is in accord with the Constitution and federal law.

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