September 28, 2010 / 6:29 PM / 9 years ago

UPDATE 1-Republicans block ending offshore jobs US tax breaks

* Democrats vow to make vote a campaign issue

* Republicans, business groups call bill a political stunt (Adds some Democrats sided with Republicans, details on bill)

By Kim Dixon

WASHINGTON, Sept 28 (Reuters) - U.S. 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 Nov. 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 Nov. 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)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below