Tammy Duckworth Intros Bill to Keep Jobs Imperiled by GOP Tax Law Based in U.S.
Senators Tammy Duckworth (D-IL) introduced legislation last week to close a loophole created by the new tax law that encourages U.S. companies to move jobs and operations overseas in order to minimize their tax liability. The Removing Incentives for Outsourcing Act, which Duckworth introduced with Senators Amy Klobuchar (D-MN) and Chris Van Hollen (D-MD), would eliminate what they called an unfair incentive that allows U.S. companies to use excess foreign tax credits (FTCs) to shelter profits in tax havens. Under current law, a U.S. corporation may use FTCs to reduce U.S. tax liability on offshore profits by whatever amount the company paid in taxes in the country in which it earned the profits. While this makes sense on a per-country basis, the Senators said the new law’s use of a blended or “global rate” provides a perverse incentive for companies to shift jobs and operations overseas in order to preserve the strategic value of tax havens. Their bill would aim to fix this problem by instituting a “per-country” minimum tax instead of a blended or “global rate” under current law. The measure would also eliminate companies’ ability to deduct 10% of their tangible assets before the tax rate on foreign income applies. The bill would also require the Joint Committee on Taxation to conduct a study of various proposals for taxing overseas income and evaluate the options according to whether the proposal minimizes opportunities for the avoidance of U.S. taxes and minimizes incentives for outsourcing American jobs. “Despite Republicans’ claims that they would bring jobs back to America, it’s clear the GOP Tax Scam is helping mega-corporations offshore jobs and costing middle-class taxpayers not only millions of dollars, but their livelihoods as well,” Duckworth said. More here.