US
House GOP Attempts To Use Tax Provisions To Stop Terror Funding In Iran
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Republicans pushed to stop President Barack Obama from waiving tax provisions that discourage conducting business with Iran during a House Ways and Means Subcommittee on Oversight hearing Wednesday.
GOP members said it’s crucial to discourage companies from doing business with the country in fear the revenue will be used for state-sponsored acts of terror.
Lawmakers have expressed skepticism Iran will hold up their end of the bargain, which lifts the Middle Eastern country’s economic sanctions in exchange for a delay in its nuclear program — resulting in an influx of up to $150 billion in funds in addition to revenue gained through trade.
“Over the years, Iran has increased support for terrorism, committed heinous human rights violations, and engaged in an illegal mission to develop nuclear weapons,” said Chairman Peter Roskam. “To punish these bad acts, numerous countries have imposed economic sanctions against Iran, and the United Nations Security Council has followed suit.”
Under current policy, taxpayers can’t receive foreign tax credits for business done within the country and shareholders are taxed for any income earned in Iran.
The Joint Comprehensive Plan of Action (JCPOA) allows for the country to block inspections of its facilities, leaving critics of the deal concerned Iran will violate the deal and obtain weapons of mass destruction.
Former top Pentagon official Douglas Feith came out firmly against lifting sanctions, citing that the country has not invited engineers from outside Iran to dismantle its nuclear facilities unlike Libya under the Qadafi regime.
“The Iranian regime now, however, has made no such showing. On the contrary, it appears intent on continuing to finance, arm, train and aid Hezbollah and other terrorist organizations,” he said. “President Obama has had to explain to critics that such support for terrorism does not violate the JCPOA and is a separate matter entirely.”
Kenneth Stethem, former Navy SEAL and brother of Robert Dean Stethem, who was murdered by Hezbollah terrorists during the hijacking of TWA Flight 847 in June 1985, said he thinks the Obama administration hasn’t put the United States’ foreign interests first and has done more to benefit Iran.
“I think our administration, our Congress and our federal government should use every means available in every way to fight them until we know the that jihad is over or that regime is replaced,” said Stethem, adding he thinks the Obama administration has done more to help Iran than the United States.
Illinois Republican Bob Dold question whether the supreme leader would abide by JCPOA.
Executive Director Foundation for Defense of Democracies Center on Sanctions and Illicit Finance Mark Dubowitz said he expects the country to cheat and warned that the foreign subsidiaries loophole will be reopened under the deal — meaning foreign subsidiaries of American parent companies would be allowed to do business with Iran.
“There is no doubt, when you look at the Iranian open books budget, there transparent declared budget, they are going to give a 50 percent increase to the entity, the Revolutionary guards, responsible for carrying out terrorism,” Dubowitz said. “So they have actually even signaled to us publicly that they are increasing terrorism, not to mention the off the books money of tens of billions of dollars that’s sitting in these holding companies and shadow entities that they use to fund their terror activities.
According to the International Monetary Fund, Iran’s economy will grow by up to 5.5 percent due to the lifted sanctions.
Dubowitz suggested raising the costs for international companies and the foreign subsidiaries of U.S. companies working with IRGC and EIKO.
“Let this be a warning to companies that are eager to rush to do business with Iran. We are very interested in the provisions in the tax code that make it costly to do business with Iran, and are looking at ways to strengthen them,” said Roskam. “Don’t count on the after tax profits as they might exist today.”
While still serving as chairman of the Ways and Means Committee, House Speaker Paul Ryan wrote the commander in chief in September asking him to keep the punitive tax penalties in place. Roskam said the former chairman’s inquisition has yet to be answered by the administration.
Several Democrats on the committee condemned Republican efforts to break apart the deal.
“As we speak, the agreement is being implemented, and Iran is just beginning to dismantle its nuclear weapons program,” said Ranking Member John Lewis. “Any legislative attempt to undermine this opportunity for peace cannot, must not, be entertained. ”
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