Republicans block ending offshore jobs tax breaks

WASHINGTON Tue Sep 28, 2010 2:30pm EDT

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WASHINGTON (Reuters) - Senate Republicans blocked a Democratic bill on Tuesday to end tax deductions enjoyed by companies that close their U.S. plants and move overseas.

With a largely party-line vote of 53-45, Democrats failed to muster the 60 votes needed to clear a Republican procedural hurdle against the measure, which would also give employers a tax break to hire new U.S. workers.

Five members of the Senate Democratic caucus broke party ranks and opposed the bill, including Max Baucus, chairman of the tax-writing Finance Committee.

While most Democrats back ending tax preferences for multinational companies moving overseas, several have opposed tightening the rules, arguing they need to be examined within a broad overhaul of the tax code.

Democratic backers vow to make the vote a campaign issue in the November 2 congressional election. They contend Republicans have undermined their efforts to create jobs, a top voter concern, and that the tax system favors corporations.

"Why in the world would millions of Americans who are losing their jobs be subsidizing operations that are closed up, and the cost of doing that, and sending jobs overseas?" Michigan Democratic Senator Debbie Stabenow said.

Democrats are fighting to retain control of Congress in the November 2 elections.

Republicans and business groups dismissed the bill as a political stunt that would increase taxes on companies and undermine job growth.

The parties are fighting to prove they are making the best effort to create jobs. Nearly 15 million Americans are out of work and unemployment has been stuck near 10 percent for more than a year.

"The companies this bill targets, by and large, aren't opening overseas subsidiaries to make products for Americans," Senate Republican Leader Mitch McConnell said. "They're moving overseas to serve foreign markets, in addition to the markets they already have in place here, and that creates jobs here in the United States."

The bill also takes on a hot tax topic known as "deferral," the ability of companies to defer taxes on income earned abroad.

President Barack Obama's budget aims to sharply curtail that practice. The bill would repeal deferral for companies that close or cut a business in the U.S. and start or expand overseas with the intention of importing goods for sale in the United States.

(Additional reporting by Thomas Ferraro; Editing by Vicki Allen)

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Comments (6)
jalee wrote:
I think more information on this needs to be vented.

Sep 28, 2010 1:25pm EDT  --  Report as abuse
azted123 wrote:
It would seem that our politicians are working hard to protect their re-election
funds from Corporation by defeating this bill. They will regret this come Nov. when can we expect common sense, honesty, and respect from those that are supposed to lead this country? Perhaps we should bring back the good old tar and feathers and a ride on a rail out of Washington.

Sep 28, 2010 1:28pm EDT  --  Report as abuse
grasspress wrote:
yea, i don’t get it. are the american people so distracted and detached that they just can’t do the research necessary to stop the conservative ’spin machine’ lies and misrepresentations?

despite what the ‘tea party’ says about its ‘way above average’ (m bachman) advocates, half the voters in the country have below average intelligence and these are the ones the republicans are targeting. they need them because anyone with half a brain can see through their inflammatory statements.

Sep 28, 2010 1:28pm EDT  --  Report as abuse
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