You may end up paying $8.5 billion per year to send even more jobs overseas if Republican Chairman of the House Ways and Means Committee Bill Thomas has his way.
He started this last year and has had a hard time pushing it through because even Republicans are choking on it.
It's important now because the World Trade Organization (WTO) has started sanctions against U. S. exports. Here's the story:
Last December 8th, the WTO passed legislation that would automatically implement up to $4 billion in trade sanctions against the U. S. unless the U. S. repeals its extraterritorial income exclusion (“ETI”) legislation by March 1, 2004. The ETI was an export subsidy to Companies like Boeing and Microsoft, and was effective in creating and keeping jobs in America.
Bill Thomas quickly responded with what he called the "American Jobs Creation Act of 2003" (HR 2896). Unfortunately, this is another example of Congressional skill in coming up with names that hide the true effects of the legislation.
Republican Thomas' act does include incentives for creating jobs ...
But the incentive is for creating jobs overseas.
"H.R. 2896 provides for the repeal of the ETI regime, and counters the repeal with replacement legislation that would provide a tax benefit to domestic manufacturers. The bill also includes a number of tax relief provisions that would aid U.S. multinational companies in their overseas operations, including several provisions that could increase the amount of foreign taxes a U.S. multinational company may credit against its U.S. tax liability." [U. S. ETI Legislation 2003]
Costs of all the provisions of this bill have now been run up to $140 billion dollars over ten years, nearly triple the original subsidy that supported American exporters.
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