Congress this week extended for another year a tax break for foreign subsidiaries of financial services companies.
The budget bill-which the Senate approved Wednesday after the House acted Tuesday-would let banks, securities firms, and insurers postpone taxes on some income from international units in 1999 until the earnings are repatriated. A similar tax deferment was granted last year.
Financial firms have complained that current rules are unfair because, unlike competitors abroad and other U.S. industries, they must pay taxes on the earnings before subsidiaries in other countries distribute the income to their owners.
Though they lauded the extension, industry officials hope for more in the future.
"The best remedy is a permanent change in tax policy to safeguard the competitiveness of our country's financial services industry in world markets," said Steve Judge, lobbyist for the Securities Industry Association.