Senate Democratic leaders on July 18 urged passage of a measure, the Bring Jobs Home Bill (Sen 3364 ), which would end a tax break for U.S. companies that ship jobs overseas and provides a tax cut for those that return overseas jobs and business activity back to the states. The Senate is expected to hold a test vote on July 19.
Under current tax law, the cost associated with moving personnel and company operations to a new location is defined as a business expense that qualifies for a tax deduction. The proposed legislation, authored by Sen. Debbie Stabenow, D-Mich., would no longer allow the deduction for companies that move jobs and business activity outside of the U.S.
The measure would also create a new tax cut to encourage U.S. companies to bring jobs back to the states by allowing companies to qualify for a tax credit equal to 20 percent of the cost associated with returning jobs and business activity to the United States. The company would then be able to apply the 20-percent tax credit against its corporate income tax. Moreover, companies returning business activity to the U.S. would still qualify for the deduction currently available for the costs associated with moving personnel and business activity, on top of the 20-percent tax credit.
“We need to be exporting our products, not our jobs,” said Stabenow. “Instead of giving tax breaks to companies that send jobs overseas, we should cut taxes for U.S. companies that create jobs in America.”
Senate Majority Whip Richard Durbin, D-Ill., said the measure gives Congress the opportunity to close the loopholes that encourage outsourcing while increasing incentives for companies to create jobs in the U.S. “Today, the federal tax code actually rewards companies that close a plant here in the United States and move those jobs overseas,” Durbin said. “Outsourcing American jobs to low-wage countries is unfair, unwise and puts hard-working, middle-class families on the line.”
By Jeff Carlson, CCH News Staff
SAP on Sen 3364, Bring Jobs Home Act
Bring Jobs Home Act, Sen 3364