Last fall, the Senate failed to pass a that would have ended tax breaks for U.S. companies that move jobs and manufacturing plants overseas. Now, our legislators have a chance to redeem themselves.
Last fall, a Senate bill designed to end tax breaks for U.S. companies that move jobs and manufacturing plants overseas failed to pass.
The “Creating American Jobs and Ending Offshoring Act” would have given U.S. employers a two-year break on payroll taxes for new U.S. jobs that replace positions that had been based overseas.
The measure would have also reined in tax incentives for moving jobs outside the United States. Businesses would have been blocked from taking any deduction, loss or credit for costs related to reducing or ending U.S. operations while expanding similar operations outside the country. The bill would also have changed current tax laws that allow companies to defer paying U.S. tax on income earned overseas until the profits are brought back to the United States.
Regrettably, the bill was filibustered. With the help of four Democrats and one independent, Senate Republicans blocked Democratic efforts to end debate and ultimately vote on the measure.
That’s too bad. Certainly, we don’t wish to discourage U.S. multinational corporations from pursuing foreign markets. Nor do we want to prevent U.S. manufacturers from offshoring entirely, assuming they’ve looked beyond mere price and considered the total costs of doing so. Nevertheless, providing U.S. manufacturers with some financial incentives to repatriate jobs from low-cost labor countries seemed like a good idea to us.
Fortunately, our legislators have a chance to redeem themselves.
In January, Sen. Sheldon Whitehouse, D-RI, introduced the “Offshoring Prevention Act” (S. 45) as part of a broader initiative dubbed the “Making It in Rhode Island” plan. The bill would end a tax loophole that permits companies manufacturing goods abroad for sale in the United States to defer the payment of income taxes on related profits. In addition to discouraging the offshoring of American jobs, the bill would help close the budget deficit, raising $19.5 billion in revenue over 10 years.
In the House, Rep. Frank R. Wolf, R-VA, has introduced the “Bring Jobs Back to America Act” (H.R. 516). Among other provisions, the bill:
• Requires the Commerce Department to create a National Manufacturing and Repatriation Strategy and report back to Congress within 90 days.
• Creates Repatriation Task Forces with representatives from the Commerce Department and the private sector to support efforts of state and local economic development agencies to attract foreign jobs.
• Mandates a study of tax incentives to assist companies looking to return jobs to the U.S. market.
• Prioritizes patent applications from American universities to ensure that cutting-edge new technologies are rapidly transferred to U.S. companies.
• Provides intellectual property protections to prevent other countries from stealing U.S. technology.
We urge Congress to support these bills and stand by their constituents in the manufacturing workforce.
The Editorial: Bills Would Encourage Companies to Reshore Jobs
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