New Senate Tax Plan Softens Proposed Interest-Deduction Limit

Multinational companies would have some more flexibility in keeping their interest payments tax-deductible under a new Senate Democratic version of President Joe Biden’s tax plan.

The Finance Committee’s plan, released Saturday, would also toughen limits on corporate tax inversions in an effort to compensate for the revenue that would be lost because of the flexibility on interest deductions.

Companies had complained about the proposed new limit on interest deductions under tax code Section 163(n), which was part of the tax package that the House passed last month. That provision had “a pretty broad net that raised a lot ...