Top Republican Cantor backs tax break on foreign profit
WASHINGTON (Reuters) - A top Republican in the House of Representatives said on Tuesday he backs a tax break for companies on foreign profits brought back to the United States.
Under repatriation, companies can bring home profits earned abroad for a certain period of time under reduced tax rates.
House Republican leader Eric Cantor of Virginia, home to tech companies pushing for the tax break, was responding to a question during a briefing to reporters.
The United States adopted a repatriation holiday in 2004 that let companies bring funds back under a 5.25 tax rate. The top marginal corporate tax rate is 35 percent.
The current proposal would provide a temporary revenue boost for the government, but over the long term it would reduce corporate tax payments. A specified rate is not yet under serious discussion among lawmakers.
Many Democrats say the earlier tax break failed to create jobs promised by some backers. Critics call it corporate welfare.
Still, Democratic Senator Barbara Boxer of California, who also represents technology companies, backs a repatriation proposal in the Senate that is expected to get Republican support.
It is unclear whether the measure would pass the Democratic-led Senate. Many say such a policy would have to be part of a broader tax code overhaul now being mulled in Congress, but that is expected to take years.
U.S. companies are said to be sitting on about $2 trillion in cash and President Barack Obama told business leaders on Monday he would like for them to use some of that money to hire new workers.