Bring Jobs Back Home Act -- Motion to Proceed
Floor Speech
Mr. THUNE. Madam President, I rise today to speak in opposition to the legislation pending before the Senate, the so-called Bring Jobs Home Act. I oppose this bill because it is a political stunt designed as an election-year campaign ploy that will have no meaningful impact on job creation or on economic growth. In fact, this bill is a carbon copy of a bill the Senate rejected 2 years ago when it was offered by another Democratic Senator who just happened to also be up for reelection.
Simply put, if there is a Democratic bill on the Senate floor supposedly about outsourcing, you can rest assured it must be election season. The bill before us purports to deal with the problem of companies relocating jobs from the United States to foreign countries by denying the deduction associated with doing so. This must be the tax benefit for shipping jobs overseas that we heard so much about from the Obama campaign in 2008 and again in 2012.
There is only one problem with repealing this special tax break for companies that ship jobs overseas. It does not exist. According to the Joint Committee on Taxation, ``Under present law, there are no targeted tax credits or disallowances of deductions related to relocating business units inside or outside the United States.'' That is from the Joint Committee on Taxation.
This statement is not surprising, given that numerous independent fact checkers disputed the repeated claims in 2008 that companies were receiving tax breaks for shipping jobs overseas. These fact checkers called that statement ``false'' and ``misleading.'' But I guess the facts do not matter when it is an election year. What this bill will do is insert yet more complexity and uncertainty into our Tax Code.
The reality is the United States economy is a $17 trillion enterprise, with businesses all across this country constantly closing old operations and opening new ones. If this bill becomes law, companies that might want to close an old factory or open a new one would now have to worry if they will have to pay a tax penalty, even if their decisions are totally unrelated to any business decisions they might make outside of the United States.
The legislation also includes a new tax credit for companies that eliminate a business operation in a foreign country and move that operation to the United States. Well, that sounds like a good idea. But consider how this would tilt the playing field against companies here in America that have not opened operations overseas. A purely domestic company that opens a new factory in my State of South Dakota will not get a Federal tax credit for doing so, but a global company with jobs overseas will get a generous credit under this bill.
Consider what a coalition of leading business organizations made up of the Business Roundtable, the Information Technology Industry Council, the National Association of Manufacturers, the National Foreign Trade Council, and the U.S. Chamber of Commerce had to say recently in a letter regarding the legislation that is pending before us.
Many of the major business organizations in this country said:
While intended to promote U.S. job creation, the legislation actually would have the unintended consequence of making it even more difficult for American worldwide companies to compete at home and in world markets, thereby placing at risk jobs of American workers.
This is a letter from some of the major business organizations in this country.
If we want greater economic growth and more jobs, we need a Tax Code that creates a level playing field, not one that picks winners and losers based on the preferences of Members of Congress.
Even if we were to assume that a new tax credit for insourcing would be a good thing, the official estimate of the bill from the Joint Committee on Taxation tells us that this particular tax credit will have essentially no impact on our economy. According to this new estimate, the new insourcing credit will provide a tax credit to U.S. companies of $35 million a year. That is $35 million out of a $17 trillion economy or, put another way, this credit will equal .000002 percent of annual U.S. economic activity. Yes, that is a decimal point followed by five zeroes. This bill isn't a drop in the budget; it is more like a drop in the Pacific Ocean.
Yet despite the fact this legislation won't help our economy or create jobs or make America more competitive in the global economy, I voted with most of my colleagues to move forward with this debate because I believe we need to have a robust debate about those measures that will energize our economy.
As such, I filed a number of amendments that would have a meaningful, positive impact on our economy--unlike, I might add, the underlying bill. For example, I filed an amendment to make the small business expensing limits, which expired at the end of last year, permanent, something that I hear about consistently from farmers, ranchers, and small businesses in my State of South Dakota.
These limits allow small businesses, farmers, and ranchers to deduct up to $500,000 per year in expenses, making it easier for these businesses to grow and to hire new workers.
I filed an amendment to make the R&D tax credit permanent. This amendment would also strengthen the credit by raising the credit rate from 14 percent to 20 percent, thus making this credit more competitive with the research incentives offered by many European and Asian nations.
I have also filed an amendment to improve the tax treatment of S corporations if they convert into a C corporation, thus making this popular form of business operation more easily accessible. This amendment would also make it easier for S corporations to give appreciated property to charity.
I filed an amendment to make permanent the Internet Tax Freedom Act, which currently protects most Internet users in America from taxes on their Internet access. This law was first enacted in 1998. For more than 15 years it has helped our economy grow, and it has helped the digital economy flourish by keeping State and local taxes off of Internet access, regardless of consumers' access to the Internet via their home computers or by handheld device. Unfortunately, this law is scheduled to expire in just over 3 months on November 1 if we don't take action to prevent that.
Some may claim that my amendments are partisan amendments--that these tax relief measures are simply Republican priorities that can't muster support on the Democrat side of the aisle. The problem with this claim is that all the measures I have just mentioned have found Democratic support already--significant Democratic support.
Consider the R&D amendment I just mentioned. It is identical to the bill that passed the House of Representatives with 274 votes in favor, including 62 House Democrats. That is right, roughly one-third of House Democrats have already voted for this exact amendment.
The same is true for the small business expensing amendment I mentioned. An identical measure passed the House in June with 272 votes, including 53 House Democrats. Consider the S corporation improvements, which were passed by the House with 263 votes, including 42 House Democrats voting yes.
Consider my amendment to make the Internet tax moratorium permanent. My bill, with Finance Committee Chairman Ron Wyden, to make this law permanent has 52 Senate supporters.
In fact, this bill has so much support that an identical bill in the House, just last week, passed by a voice vote. This measure, supported by a majority of Senators, sponsored by the Democratic chairman of the Finance Committee, and approved by the House of Representatives by a voice vote isn't even scheduled for a vote in the Senate. What a shame.
Consider the medical device tax repeal, which is supported by 79 Senators, including 34 Democratic Senators.
Unlike the minuscule economic impact of the bill pending on the Senate floor before us now, repealing the medical device tax would remove an ObamaCare tax increase totaling $24 billion over 10 years on some of the most innovative companies in America. According to a survey by the trade association AdvaMed, the medical device tax is estimated to destroy as many as 165,000 American jobs.
So let's be clear. It is not that there aren't reasonable measures to boost our economy that we could be considering. All of the measures I have mentioned have broad bipartisan support. The problem is simply that the Democratic majority refuses to allow their consideration.
The Senate majority would prefer we spend our time on inconsequential election-year gimmicks rather than any of the job-creating measures I have just mentioned.
In fact, Senate Democrats have chosen to block nearly all Republican amendments rather than risk having to take difficult votes. Consider that the Senate has had rollcall votes on only 12 Republican amendments since last July. House Democrats--the minority in the House of Representatives--in contrast have had 189 amendments voted on during that same period of time.
Put another way, House Democrats have been allowed, on average, more than one vote for each legislative day the House has been in session over the past year. In the Senate, Senate Republicans have been allowed just one vote per month.
Let me repeat that. The minority in the House is being allowed one vote per legislative day. The minority in the Senate is being allowed one vote per month.
The Senate used to be known as the world's greatest deliberative body. That description now sounds like a cruel joke, considering how few amendments we have been allowed to consider.
The other measure our economy desperately needs is comprehensive tax reform. If we really care about making America a more attractive place to do business so as to lure new business investment jobs, we need to have a much simpler Tax Code with tax rates that are competitive with our global competitors.
Let's consider the facts. When President Reagan signed the Tax Reform Act of 1986 into law, the United States had a corporate tax rate that was more than 5 percentage points below our major economic competitors.
The U.S. corporate tax rate has basically stayed the same since 1986. Yet today our tax rate is the highest in the developed world and is more than 14 percentage points higher than the average of developed economies.
Why? Look at what has happened. Unlike the United States, other nations decided they needed to lower their tax rates to spur economic growth and job creation. Unfortunately, today we are reaping the negative consequences of inaction as we see more and more investment and economic activities moving to those nations that have created a more favorable business environment.
If we want to keep the best, highest-paying jobs at home, we don't need new tax credits targeted at a narrow set of companies. We need a complete overhaul of our tax system with new, competitive tax rates and a modernized system for taxing the global revenues of American companies. Yes, it is going to be a difficult lift, but it is far from impossible.
Consider the United Kingdom, which as recently as 2010 had a 28 percent tax rate and an outdated system for taxing global income. The UK enacted tax reform that will result in a 20-percent tax rate by next year and has already resulted in a modernized system for taxing the income earned by global U.K. companies.
Over the past 5 years, Japan--another major economic competitor of the United States--has done something similar. Japan cut its corporate tax rate by 5 percentage points and has moved to a more competitive system for taxing global income.
If the UK, Japan, and other nations can modernize their Tax Code for competition in the 21st century global marketplace, certainly we in the United States can do it as well.
In closing, I hope the Senate Democrats will change course and allow for an open and robust amendment process to allow a wide variety of job-creating measures to be considered.
Our economy, still mired in the sluggish Obama economy, could certainly use it. But, if not, I look forward to a future Congress where the Senate can get back to real debate and real solutions.
I hope that once the campaigning is done, once the election-year slogans have been retired, we can get back to real, substantive legislating.
American families and workers deserve permanent tax and regulatory relief. They deserve a better economy than they have today, and they deserve a Senate that once again functions as the world's greatest deliberative body and puts their interests first, and their futures, their quality of life, and their standard of living where they should be.
I yield the floor.
BREAK IN TRANSCRIPT
Source