The feeding frenzy by United States Senators against companies moving offshore to cut their tax bill intensified yesterday, after lawmakers vowed to push for legislation that will halt companies reincorporating in tax-friendly locations like Bermuda.

The Senate Finance Committee leaders met yesterday and said they would aggressively press for legislation that stops US companies from moving their headquarters overseas to cut taxes.

"Our legislation... is designed to put the brakes on the potential rush to move US corporate headquarters to tax havens," said panel chairman Max Baucus, of Montana.

So far this year two tax bills have been introduced by US legislators in the House of Representatives. The bills are aimed at stopping US companies from relocating offshore, particularly to Bermuda.

The first bill was proposed by Rep. Richard Neal and Rep. Scott McInnis and several American legislators have indicated they will put forward further bills, including Sen. Paul Wellstone and Sen. John Kerry.

In essence, the bills aim to levy US taxes on all income - including foreign revenues and sales - earned by corporations that reincorporate outside of the US.

The debate has largely focused on Bermuda-based companies such as Tyco, Global Crossing, Ingersoll-Rand and a company which has not yet "redomesticated", Stanley Works.

On Friday last week Weatherford International Ltd also announced plans to move to Bermuda which are expected to be voted on by shareholders at the end of the month.

Yesterday, Sen. Baucus said he plans to bring the bill up for a vote soon and added he was "quite confident" the legislation can be passed into law this year to reduce occurrences of the practice.

"We've got a problem," said Sen. Baucus, who pointed out that the vast majority of US individual taxpayers will do their duty by Monday's income tax filing deadline. "Everyone should help pull the wagon... Otherwise, we'll reach the point where honest taxpayers will feel like chumps."

Sen. Baucus is introducing corporate expatriation legislation along with Sen. Charles Grassley, of Iowa, who is the ranking Republican on the Senate Finance panel.

"Our bill requires the IRS to look at where a company has its heart and soul, not where it has a filing cabinet and a mailbox," Sen. Grassley said.

The Baucus-Grassley bill has been dubbed the "REPO Act," and would deem the new foreign-based parent as a domestic corporation for US tax purposes in some cases and enhance IRS scrutiny of tax transactions in other cases.

The during the day's debate the two senators singled out two tool-making companies that have moved their headquarters overseas in recent months - Ingersoll-Rand Co . Ltd., which left for Bermuda after September 11 and Stanley Works, which has announced plans to leave.

"These expatriations aren't illegal. But they're sure immoral," Sen. Grassley said. "If companies don't have their hearts in America, they ought to get out."

The legislation is aimed at targeting two classes of transactions that allow companies to shift operations overseas. One is what is called a "pure inversion" manoeuvre where the US company becomes a subsidiary of a foreign corporation and shareholders end up with ownership in a foreign company.

The other "limited inversion" occurs when a company shifts just enough of the company overseas to avoid taxes while allowing US shareholders to continue controlling the company.

Both the senators said they hope their bill will stem the rising tide of corporate expatriation, but they added they understand US foreign tax laws need a review and possible changes to level competitive tax disadvantages US companies face.

"The senators believe that we need to bring our international tax system in line with our open market trade policies," a summary of the legislative proposal said.

Yesterday, the US media was already filing on the evils of the so-called "tax havens" that are said to be draining the US of its cash.

Mark Anderson of Dow Jones reported: "The bill aims to stop corporate migrations to tax havens such as Bermuda by removing tax incentives tied to so-called corporate expatriation inversion plan. It applies to corporate activity taking place after March 21, when the Senate Finance panel first held a hearing on the subject."

Curt Anderson, AP's tax writer wrote: "For every convicted tax evader like Daniel Bullock, dozens more get away with cheating that costs the US government as much as $70 billion a year, the Senate was told yesterday.

"The testimony of Bullock and other tax evaders before the Senate Finance Committee came as the panel's top two senators, Democrat Max Baucus and Republican Charles Grassley, introduced legislation intended to stem a tide of US companies moving their legal headquarters to Bermuda to escape taxes."

In a show of support for the star-spangled banner Mr. Bullock, a California orthopaedic surgeon, and the other former "tax evaders" described how their scepticism about the IRS and questions about the legitimacy of the tax code enabled them to be easily swept up in enticing schemes to avoid taxes and how far they fell once caught.

He told the meeting: "I realise now there is a price to be paid for being an American." Mr. Bullock, who is now serving an 18-month sentence at a federal prison in Atwater, Calif. "It's called filling out a tax form, making sure it's right and sending it in."