Creating American Jobs and Ending Offshoring Act (S. 3816)
by Dan Crawford
I haven’t the time to check it out, but here is a note and link to a Senate bill on offshoring:
The Senate is scheduled to vote TODAY on the Creating American Jobs and Ending Offshoring Act (S. 3816) to set a time limit for debate and cut off a filibuster.
The bill has three main components:
To encourage businesses to create jobs in the United States, it provides businesses with relief from the employer share of the Social Security payroll tax on wages paid to new U.S. employees performing services in the United States. To be eligible, businesses must certify that the U.S. employee is replacing an employee who had been performing similar duties overseas.
The bill eliminates subsidies U.S. taxpayers provide to firms that move facilities offshore by prohibiting a firm from taking any deduction, loss or credit for amounts paid in connection with reducing or ending the operation of a trade or business in the United States and starting or expanding a similar trade or business overseas.
It also ends the federal tax subsidy that rewards U.S. firms that move their production overseas. Under current law, U.S. companies can defer paying U.S. tax on income earned by their foreign subsidiaries until that income is brought back to the United States. This is known as “deferral.” Deferral has the effect of putting these firms at a competitive advantage over U.S. firms that hire U.S. workers to make products in the United States.
The part about the payroll tax break is a real hoot. Wages are 1/2-1/4 less so the 6% savings doesn’t move the needle much.
The other two are way overdue however.
It is tought to stop an avalanche that has already started.
How will we compete with .31 an hour labor in Chinese suicide sweat shops? It is a real puzzle.
For those of you interested The (Toledo) Blade is doing a series this week on the destruction of manufacturing in northwest Ohio and southeast Michigan, and the resulting damage. . Put the name in any search engine.
Note – the Rethugs are fighting this.
Rusty –
I’m from Toledo. Every once in a while, the Blade does something right. Thanks for pointing it out.
WASF!
JzB
It’s a shame that something as relatively sensible as ending support to companies that offshore should be tied to something as stupid as “eliminating the payroll tax.”
Have they said how they are going to replace the payroll tax money? or are they just going to surprise the workers when they go to retire?
This looks to me like just another sneak attack on Social Security.
There won’t be any takers on that one in corporate world, unless they can convince the USG somehow that all new hiring in the US would have gone offshore. It’s possible , I guess, depends on the details and administration.
I guess some on the Hill may try parleying it’s passage into a political statement showing support for the concept of using payroll taxes as tax policy. They are running out of new ideas.
Y’all–The cloture vote failed. About 7 votes short. So, chalk one up for the R’s. NO
When did you leave Toledo? I grew up in northwest Ohio and Toledo was the big city. Lived there a few years and worked there a lot.
This had very little to do with policy and a lot to do with the upcoming election.
Sherrod Brown is a decent guy, but about 15 years too late.
coberly: “This looks to me like just another sneak attack on Social Security.”
See my note below. 🙂
Well, Min–Oh, my! What a curious way to undo what they did and shift paying for the employer’s contribution to the rest of us. Now, that was pretty dumb. STill, the offshoring tax provisions were worthwhile. NancyO
The title of the bill sounded a tad pretentious anyway. Probably should strip out the part about payroll taxes and resubmit it under a new name, like “Pathetic Attempt At Ending Offshore Tax And Accounting Loopholes”.
Then we should consider having the Navy invade Grand Caymen and Bermuda under the next defense spending bill.
Everyone seems to have forgotten that in 2004 we tried giving firms tax forgivenness on the retruen of forign profits.
According to this study
http://www.drandreassimon.com/Site/About_Me_files/CBPP_2009.pdf
it produced no increase in domestic hiring or investment.
and remember, this is a study was put out by the AEI, a conservative think tank.
Min
I think if you had read my comment you would have seen that I knew this. The point then is why the hell involve Social Security at all?
The answer is to continue to create in the minds of the people and the employers that Social Security is a jobs killer.
Nancy
thank you. i hadn’t even thought of that.
spencer – I didn’t forget. It was a tax gift of major proportion to shareholders (i.e., company officers), but nothing more.
As an aside,Cousin Lucia and Ryan Grim have a good summary at the HuffPo: http://www.huffingtonpost.com/2010/09/28/gop-chamber-of-commerce_n_741970.html
coberly: “I think if you had read my comment you would have seen that I knew this. The point then is why the hell involve Social Security at all?”
I have read several of your comments about this recently, and I never got the idea that you thought that the legislation funded the Trust Funds as though the payroll tax had been collected.
In this case, I think that involving the payroll tax is that it is easy to do. The employers collect the tax, after all. Just let them retain half of it. If the Dems thought that they were sending an anti-Social Security message, they would find a different way of giving the employers tax breaks.
SS is not a job killer, that’s a croc. Why can’t we level the playing field? There no environmental,OSHA, or other fair labor practices, laws and compliance costs “over there”. Both parties have let corporate agendas destroy the middle class via offshoring.
Min
sorry, i am a bit testy about this. thank you for providing the “language of the bill.”
neverthelss the “payroll tax holiday” is being sold as “the payroll tax is a jobs killer.” and i read this from liberals. it is proof positive that there is no actual brain function among the political elite. give these people a jingle for their brains and pretty soon they are humming it on the subways.