Senate Panel Backs Bill To Give Tax Windfall to U.S. Companies

Dover

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Thu Oct-02-03 02:30 PM
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Senate Panel Backs Bill To Give Tax Windfall to U.S. Companies

Senate Panel Backs Bill to Give Tax Windfall to U.S. Companies
By EDMUND L. ANDREWS

Published: October 2, 2003

WASHINGTON, Oct. 1 � American corporations that have deferred taxes for years on the profits they made overseas could be in line for a huge windfall from Congress.

Hoping to bring more investment to the United States, the Senate Finance Committee approved a bill on Wednesday that would give a one-time tax holiday to companies that have accumulated as much as $400 billion in foreign profits on which they have yet to pay American taxes.

American companies can usually defer paying taxes on foreign profits as long as they keep the money outside the United States. Much of that money is reinvested in foreign operations, and some is parked in passive investments.

The Senate bill, which is part of a much broader bill to overhaul laws on international corporate taxation, would let companies bring those profits back and pay a tax rate of 5.25 percent.

Supporters say the six-month tax holiday could lure as much as $300 billion back into the United States, which in turn would increase investment and create jobs.

To press their case, companies like Hewlett-Packard have formed a broad coalition that includes the likes of Eli Lilly, Merck, Intel, Sun Microsystems and Dell Computer..>>

MORE - http://www.nytimes.com/2003/10/02/business/02TAX.html

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Emboldened Chimp

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Thu Oct-02-03 02:34 PM
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1. This is disgusting

More tax breaks for the corporations that have a stranglehold on our representatives. Just plain gross.

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Dover

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Thu Oct-02-03 02:36 PM
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2. But many are saying it sends the wrong message....

...But many tax experts, including top tax officials in the Bush administration, say the move would be a mistake because it would validate the strategies of companies that spent years sheltering the overseas profits.

"The company that left Louisiana is going to pay a 5 percent tax on the widgets they make overseas, and the company that stayed in Louisiana is going to pay a 35 percent tax," said Senator John B. Breaux, Democrat of Louisiana. "If that isn't an incentive to leave, I don't know what is."

Critics also warn that there is no guarantee that the companies will invest their repatriated profits in new factories or larger work forces. Indeed, Republican lawmakers defeated an amendment offered by Mr. Breaux on Wednesday that would have required companies to reinvest their foreign profits in things like new equipment.

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Dover

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Thu Oct-02-03 02:40 PM
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3. I think this amounts to blackmail by these companies.

Edited on Thu Oct-02-03 03:02 PM by Dover

If they don't want to be "citizens" of a democracy and pay the costs that go with the privilege like the rest of us, then GET OUT!!!

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papau

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Thu Oct-02-03 02:43 PM
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5. Blackmail was "next 10,000 jobs we send overseas we blame on GOP"

No really - the folks at GE really are in print with the 10,000 job loss if they do not get tax cut and if they do not slow the elimination of the loophole and make it into a 3 year phase out!

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papau

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Thu Oct-02-03 02:41 PM
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4. Immediate tax cut to make up for 3 year phase out of FSC - so get 80%

of the Foriegn sale Corp loophole PLUS new tax cut.

The EU should love this - after waiting 3 years after the WTO ruled it illegal, we give 3 more years as a phase out period.

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CheshireCat

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Thu Oct-02-03 03:40 PM
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6. Conservatives LIKE welfare

as long as it is for corporations.

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