Lawmakers to Vote on The Investing in American Jobs and Closing Tax Loopholes Act
House lawmakers are set to vote Friday on a piece of legislation deigned to bolster the nation’s infrastructure, create jobs and crack down on multinational companies that evade taxes.
The Investing in American Jobs and Closing Tax Loopholes Act of 2010, introduced by Rep. Sander Levin (D-MI), would extend three successful Recovery Act provisions that have created jobs despite the sour economic environment created by the recession.
The bill would extend the Build America Bond program, which has supported 1.9 million jobs across the country, according to Levin. Through the program, the federal government pays 35 percent of the interest costs on taxable bonds sold to pay for public works projects. The program was set to expire at the end of the year but will be extended through 2012 if the legislation passes.
In addition, the bill would extend for one year the Emergency Fund for Job Creation and Assistance program. The program provide states with assistance in meeting the needs of low-income families as well as funding to create local jobs programs.
The total cost of the bill is estimated to be roughly $11.5 billion. However, it will be deficit neutral because the entire cost will be paid for by closed tax loopholes for multinational corporations.
“This legislation reaffirms our commitment to creating jobs in America and closing loopholes that encourage companies to ship jobs and investments overseas,” Levin said in a statement.
The tax loophole was originally designed to prevent double taxation but has been abused over the years by multinational corporations to offset unrelated foreign income.
“This system is intended to ensure that U.S.-based multinational companies are not subject to double taxation,” stated the summary of the legislative text. “However, taxpayers have taken advantage of the U.S. foreign tax credit system to reduce the U.S. tax due on completely unrelated foreign income in a manner that has nothing to do with eliminating double taxation.”
Republicans are expected to almost unanimously oppose the measure. They argue that the bill will create only public sector jobs instead of private sector jobs. They have also criticized the way in which the bill is paid for, calling the closing of tax loopholes a tax increase and warning that it will be a drag on the economy.
“You cannot expect to increase jobs in this country when you are increasing taxes,” said Ways and Means ranking member Dave Camp (R-MI). “It just doesn’t work. Yet, that is exactly what the majority is proposing to do in this bill.”
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