Statements on Introduced Bills and Joint Resolutionsby Senator John McCain
Posted on 2015-02-05
S. 397. A bill to amend the Internal Revenue Code of 1986 to allow a
temporary dividends received deduction for dividends received from a
controlled foreign corporation; to the Committee on Finance.
Mr. McCAIN. Mr. President, today I introduce the Foreign Earnings Reinvestment Act that would generate the flow of an estimated $1.9 trillion back into the American economy by temporarily allowing companies to return profits earned overseas to the U.S. at a reduced tax rate. It is no secret that one of the primary reasons why this money is laying idle and doing nothing to spur job creation is due to the fact that our Nation has the highest corporate tax rate in the free world at 35 percent. According to the Organisation for Economic Co- operation and Development, OECD, when you add in additional State and local taxes the combined corporate rate jumps to a staggering 39.1 percent. Whereas, the average combined corporate tax rate for the rest of the developed world, excluding the U.S. is around 25 percent.
Congress has long debated tax reform and has failed to act. It is my hope that, under a Republican controlled Congress, we will be able to move forward with tax reform, which includes lowering both the personal and corporate tax rate and eliminating tax loopholes. If we are not going to act on behalf of the American taxpayer than we need to make available temporary tax incentives to bring this money back home providing a much needed boost to our economy.
The Foreign Earnings Reinvestment Act would encourage American companies to bring overseas earnings back to the United States and creates strong incentives for those firms to invest these earnings in U.S. employees.
Specifically, the bill would temporarily reduce the current 35 percent corporate rate to an 8.75 percent effective rate on foreign earnings brought back to the United States. If companies are able to show that they are expanding their payroll by 10 percent through net job creation or higher payroll, the bill would allow these corporations to obtain up to a 5.25 percent effective repatriation rate In addition, the bill discourages U.S. companies from reducing employment by including in a company's gross income calculation of $75,000 per full- time position that is eliminated.
This common sense legislation will drive the roughly $1.9 trillion currently parked overseas back here to the United States, boosting our economy and spurring job creation.
______ By Mr. GRASSLEY (for himself and Mr. Rubio): S. 401. A bill to amend rule 11 of the Federal Rules of Civil Procedure to improve attorney accountability, and for [[Page S837]] other purposes; to the Committee on the Judiciary.