Faced with criticism that companies didn’t use proceeds of a 2004 tax holiday to create jobs directly, advocates for repeating the policy are emphasizing the indirect economic effects of repatriating more than $1 trillion.
A coalition of business groups and companies including Altria Group Inc. and Xcel Energy Inc. is warning Congress that failing to extend tax breaks on investment income would make U.S. tax rates on capital gains and dividends among the highest in the industrialized world.
President Barack Obama’s proposal to require high earners to pay at least 30 percent of their income in taxes is only one of several potential ways to boost the tax rate paid by the wealthiest Americans, tax experts say.
Democrats seeking to use the next phase of deficit-reduction talks to raise taxes for private equity managers, oil companies and high-income earners will face continued opposition from Republicans who will have the procedural power to stop them.
A senior Republican tax writer on the House Ways and Means Committee is introducing legislation that would give U.S. companies one year to bring home at a lower tax rate as much as $1 trillion in profits parked overseas.
A fresh legislative effort to allow companies to return profits to the U.S. at a lower tax rate will likely run into the same problems that have dogged repatriation advocates in recent years: its cost and the lack of guarantees that it will create jobs.