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
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
And of that about $85 billion is to "aid U.S. multinational companies
in their overseas operations."
Thomas an e-mail and tell him what to do with an "American" Jobs
Creation Act that creates jobs overseas.
In the meantime, the WTO sanctions do have to be dealt with and there are
In the Senate, we have the bipartisan Jumpstart Our Business Strengths Act
(S 1637), co-sponsored by Republican Chuck Grassley (R-IA) and Democrat Max
Baucus. In the House, we have the bipartisan Job Protection Act of 2003 (HR
1769), jointly sponsored by Republican Phil Crane , Democrat Charles Rangel
and Republican Don Manzullo.
Neither of these bills is perfect (the Senate bill was originally introduced
as the "Corporate Tax Breaks for U.S. Manufacturers bill" before
being changed to the more attractive and mind-clouding "Jumpstart Our
Business Strengths Act").
But either of these bills is a far better choice than Bill Thomas’ attempt
to have taxpayers foot the bill for sending even more American jobs overseas.