Investing Income at Home Act of 2010

Floor Speech

Ms. LINDA T. SÁNCHEZ of California. Madam Speaker, I rise today to introduce the ``Investing Income at Home Act of 2010.'' This legislation would increase investment in the U.S. economy by allowing ``closely held'' companies that earn money abroad to create American jobs by investing overseas profits here at home. This would be accomplished by updating an outdated relic of the Tax Code, the personal holding company, or ``PHC,'' tax structure.
Under current law, a personal holding company's undistributed income is taxed at 15 percent. This rate is scheduled to return to the highest individual tax rate of 39.6 percent in 2011 when the 2001 and 2003 tax cuts expire. Unfortunately the personal holding company tax has not evolved to keep up with modern business realities. Family-run companies can be subject to this tax--which they would not pay if they were publicly owned.

The Investing Income at Home Act will modify the definition of ``PHC income'' to exclude dividends received from foreign affiliates if those dividends are reinvested in the United States. Importantly, these dividends brought back into the United States could not be used by any company to pay executive salaries or benefits.

This bill will ensure closely held corporations impacted by the PHC tax regime would pay the same level of corporate tax as similarly situated publicly traded corporations. This would free them to invest dividends from foreign sources into the U.S. economy helping to create much-needed jobs here in America.

I urge my colleagues to join me in supporting this legislation.

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