The US Senate Finance Committee yesterday approved a legislative package with the aim of stopping US corporations moving offshore to lower their tax bills.

The matter came up for consideration by the Finance Committee last week but any action on the bipartisan bill - titled Reversing the Expatriation of Profits Offshore (REPO) Act and tabled earlier in the year by chairman Max Baucus and ranking minority member Chuck Grassley - was pushed off to this week.

Also up for consideration were two other drafts of legislation including a charitable contributions measure and a tax shelter bill.

The Baucus-Grassley bill - as with other bills tabled in Congress on the matter - would levy taxes on all income of US corporations that move offshore, including on foreign revenue. And the focus of these bills has largely been companies moving to Bermuda including much in the news toolmaker Stanley Works.

Meanwhile, a tax-shelter bill, Tax Shelter Transparency Act, also authored by Sen. Baucus and Sen. Grassley was also up for consideration with the aim of giving the Internal Revenue Service (IRS) more leeway for investigations into questionable transactions.

In addition, a charitable contributions measure (CARE Act), which has been pushed by President George Bush was also considered. The House approved its own charity bill last year although the idea has not been well-received in some sectors as it could cost an estimated $13 billion over ten years.

Yesterday the Dow Jones newswire reported that all three bills were approved by the Senate Finance Committee with a voice vote.

Despite bipartisan support however the report said the outlook for final passage of the so-called corporate inversion and the tax-shelter bills is bleak because they lack support in the Republican-controlled House.

The powerful tax writing House Ways and Means met earlier this month to hold hearings on the matter. And chairman Bill Thomas has suggested the House may approve a bill that would impose a temporary moratorium on inversions until the end of next year to give lawmakers time to try to overhaul the entire corporate tax code.

Such a bill had been put forward by Rep. Nancy Johnson with a moratorium that would be retroactive to September 11, 2001 and last until December 31, 2003.

Sen. Charles Grassley was reported as saying yesterday: "Our bill is a temporary response to an immediate tax-policy concern."

But Sen. Fred Thompson predicted lawmakers would ultimately pass a moratorium in order to work on a larger tax-overhaul bill. The New York Times also reported yesterday that "measures to close the Bermuda tax loophole" are coming up against resistance from Republicans in Congress, in favour of further study of the situation.

Congressmen are reportedly walking out of committee hearings to keep Congress from voting on a bill which the Times said would "almost certainly pass if given the chance."

The piece, from tax writer David Cay Johnston, said: "The loophole allows big companies to pretend legally that they are based offshore (Bermuda has been the country of choice) and then filter profits through a third country (most often Barbados), avoiding American income taxes."

Mr. Johnston, who has written numerous pieces on the subject since early in the year, questioned the legitimacy of the companies making the move to Bermuda: "There would be no effect (by legislation) on legitimate multinational corporations, like DaimlerChrysler, that have not used a haven to avoid American taxes," he said.

Despite Republican resistance, the New York Times piece reported that some Washington legislators believe a moratorium, in tandem with an in-depth study of the tax code, may be passed: "Were a bill creating a moratorium on the Bermuda deals to come up for a vote in the House while a study was under way, it would easily win 300 votes, far more than needed for passage", said Rep. Jim McCrery, who is on the House Ways and Means Committee.