For a number of years, the Treasury has been aware that our tax laws discourage exports and place U. S. industry at a competitive disadvantage throughout the world. In 1970, the Treasury proposed legislation to alleviate the drawbacks to productivity. Called the "Domestic International Sales Corporation" or "DISC" Bill, the measure vould provide tax deferral as an incentive to stimulate exports.
The material which follows is presented in three Sections. The First deals with the standards for qualification as a DISC and discusses the Treasury's attempt to blend the Export Trade Corporation requirements with those of a Subchapter S corporation. One of the most significant aspects of the DISC proposal is the provision which would )ermit the DISC to make loans to domestic producers. This is the subject of the second Section of this material. Both the first and second Sections are based on the Treasury's Technical Explanation of the proposal.
The third Section deals with the present DISC bill (H.R. 20). Many of the changes in the DISC bill compared with the technical explanation followed discussions with Treasury officials at a meeting) of this INSTITUTE and afterward. The development of some of these changes can be traced through an analysis of the provisions for qualification standards and loans to domestic producers.
