UPDATE: Senate Kills Proposed Legislation Seeking Tax Code Changes to Encourage “Insourcing” and Penalize Offshoring

more+
less-

[author: Steve Semerdjian]

Amid escalating election year tension between Republicans and Democrats on the issue of offshore outsourcing, on July 19, 2012 the Senate killed a White House-supported bill aimed at encouraging U.S. companies to bring overseas jobs back to the United States. The Bring Jobs Home Act would have amended the Internal Revenue Code by eliminating a provision that allows the cost of relocating equipment and personnel to a new location to be treated as a business expense in those cases in which the relocation is from the U.S. to an overseas location. The bill also would have created a tax credit of 20 percent of “eligible insourcing expenses” incurred in connection with the elimination of a business unit located overseas and the relocation of that business unit and the associated jobs to the U.S. (Read our post on the bill here.) The measure failed to obtain (by a vote of 56 to 42) the 60 votes required to end the Senate debate on the bill and put the bill to a final vote. The voting proceeded almost entirely along partisan lines, with only four Republican senators voting in favor of the bill.

In a statement on the Senate floor, Sen. Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, criticized the bill, calling it a joke and a waste of time. “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,” Hatch said, creating a sound bite of his own. “But as substantive tax policy goes, this proposal is a joke.”

“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,” added Hatch, alluding to the report by the Joint Committee on Taxation that the bill’s deduction disallowance provision will only raise about $14 million per year.

Rep. Bill Pascrell, Jr. (D-N.J.), a member of the House Ways and Means Committee introduced an identical bill in the House. The House bill was co-sponsored by 36 representatives, including House Ways and Means Committee ranking member Sandy Levin (D-Mich.).

 

Published In: General Business Updates, Elections & Politics Updates, International Trade Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Loeb & Loeb LLP | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »