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NEWS RELEASE 98-001; JANUARY 12, 1998 January 12, 1998
News Release 98-001
Inv. No. 332-389

ITC SEEKS INPUT FOR A FACTFINDING STUDY ON THE IMPLICATIONS FOR U.S. TRADE AND COMPETITIVENESS OF A BROAD-BASED CONSUMPTION TAX

The U.S. International Trade Commission (ITC) is seeking input from industry officials, trade associations, and others for a factfinding investigation on the implications for U.S. trade and competitiveness of replacing the current income tax system with a broad-based consumption tax.

The investigation, Implications for U.S. Trade and Competitiveness of a Broad-based Consumption Tax (Investigation No. 332-389), was requested by the Committee on Ways and Means, U.S. House of Representatives, in a letter received December 15, 1997.

In its letter, the Committee noted that there are several proposals to significantly reform the current U.S. income tax system and that many of these proposals can be characterized as consumption taxes. Examples noted in the letter include a flat tax, a national retail sales tax, and a value-added tax. The letter further noted that a number of studies have examined the effects of consumption-based taxes on international trade and found a wide range of effects on investment, imports, and exports.

As requested, the ITC will analyze various consumption tax proposals. The ITC will also provide a review of current economic analyses on this topic and a discussion of the key technical issues that can significantly affect the relationship between tax policy and international trade. The ITC report will be submitted to the House Committee on Ways and Means no later than June 15, 1998.

The ITC is seeking information for its study from all interested parties. A public hearing will be held on March 5, 1998, in connection with the investigation. Requests to appear at the hearing should be filed no later than 5:15 p.m. on February 26, 1998, with the Secretary, U.S. International Trade Commission, 500 E Street, SW, Washington, DC 20436.

The ITC also welcomes written submissions for the record. Written submissions (one original and 14 copies) should be addressed to the Secretary at the address above and should be submitted at the earliest practical date but no later than 5:15 p.m. on March 19, 1998. All written submissions, except for confidential business information, will be available for public inspection.

Further information on the scope of the investigation and appropriate submissions is available in the ITC's notice of investigation, dated January 9, 1997, which may be obtained from the ITC Internet server (www.usitc.gov) or by contacting the Office of the Secretary at the above address or at 202-205-1802.

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