Replies

http://www.govtrack.us/congress/bills/112/s3364/text

Sponsors
•Debbie Ann Stabenow (MI - D)

Co-sponsors
•Richard Blumenthal (CT - D)
•Sherrod C. Brown (OH - D)
•Benjamin L. ‘Ben’ Cardin (MD - D)
•Robert P. ‘Bob’ Casey Jr. (PA - D)
•Christopher A. ‘Chris’ Coons (DE - D)
•Richard J. ‘Dick’ Durbin (IL - D)
•Al Franken (MN - D)
•Kirsten E. Gillibrand (NY - D)
•Amy Klobuchar (MN - D)
•Claire McCaskill (MO - D)
•Jeffery A. ‘Jeff’ Merkley (OR - D)
•Barbara A. Mikulski (MD - D)
•John D. ‘Jay’ Rockefeller IV (WV - D)
•Charles E. ‘Chuck’ Schumer (NY - D)
•Sheldon Whitehouse (RI - D)

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Jul 19 2012

Hatch: Democrats’ Latest Tax Proposal a Joke

In Speech, Utah Senator Says, “We should be pursuing laws that will help, not harm, businesses and middle class taxpayers. And, the bill we are discussing on the floor today is not going to help.”

The Bring Jobs Home Act would deny the deduction for ordinary and necessary business expenses to the extent that such expenses were incurred for outsourcing. That is, to the extent an employer incurred costs in relocating a business unit from the United States to outside the United States, the employer would be disallowed a deduction for any of the business expenses associated with such outsourcing.

The Bring Jobs Home Act would also create a new tax credit for insourcing. That is, if a company relocated a business unit from outside the United States to inside the United States, the business would be allowed a tax credit equal to 20 percent of the costs associated with such insourcing.

On the surface, this proposal may sound reasonable. As sound bites go, the President’s reelection campaign and the Senate Democratic leadership have apparently decided that they can make some political hay with this proposal. But as substantive tax policy goes, this proposal is a joke.

First of all, the amount of money involved is trifling. According to the non-partisan Joint Committee on Taxation, this bill’s deduction disallowance provision will only raise about $14 million per year. That’s 14 million, not billion.

Let’s put that in perspective. This bill is supposedly a critical tax incentive to create jobs here in the United States. Yet according to the JCT, it will only raise about $14 million per year. Meanwhile, President Obama’s campaign has now spent $24 million on ads attacking outsourcing.

The American people want us to address our fiscal situation and to create the conditions for robust economic and job growth. And how are the President and Senate Democrats spending their time?

Simply put, this bill is misleading. Its supporters would have you believe that under current law there is some special deduction that exists for moving jobs outside of the United States. That is simply false.

Disallowing the business expense deduction means that income will now be measured less accurately. Gross receipts minus business expenses equals income. That’s what both accountants and economists tell us.

But even though economists, accountants, and businesses all measure income one way, Washington will now measure it another way.

Not only is this bad for business, but by disallowing deductions for certain business expenses, this proposal would measure income less accurately. And when the government’s main source of revenue is the income tax, it is rather important to measure income accurately!

Ultimately, we know that this bill is devoid of serious content because it is the product of political, not economic, necessity. This bill is a sound bite — not sound tax policy. There really aren’t a lot of dots to connect here.

http://hatch.senate.gov/public/index.cfm/releases?ID=51600c05-2653-4dc5-918b-e23be0a7adf1

the genesis of this bill’s prioritization can be traced in a straight line from 1600 Pennsylvania Avenue to the President’s reelection headquarters in Chicago. This bill is called the Bring Jobs Home Act, but its Democratic proponents have not presented any evidence of the number of jobs, if any, that will return to America if the proposal becomes law. During comments in support of the bill the sponsor referred to a chart that said, and I quote, [i]n the last decade, 2.4 million jobs were shipped overseas.

But the sponsor tellingly did not say that the bill will bring 2.4 million jobs back to America. The proponents of this bill have not even told us that jobs will return to America if this bill becomes law, much less how many. The answer is probably none, but that is exactly the sort of question we would have explored had this bill been produced by the Senate Finance Committee rather than by some campaign consultant in Chicago.

It is disappointing that even though the sponsor of this bill is a member of the Senate Finance Committee, the bill’s sponsor chose to bypass that Committee. This bill has come straight to the Senate floor without being vetted by the Committee. Her colleagues on the Committee would likely have some valuable feedback for her. Both staffs on the Committee would likely have valuable expertise that they could bring to bear on this proposal. That is why I anticipate moving to commit this bill to the Finance Committee.