To: Senate Leadership, House Leadership, Senator Charles Grassley, Senator Orrin Hatch, Senator Don Nickles, Senator Trent Lott
Re: Don\’t let the Senate-passed "Invest in the USA Act" fall by the wayside in Conference!
For the last few weeks, we at ATR have been highlighting the benefits of Rep. Phil English\’s Homeland Investment Act, and its Senate counterpart, Sen. John Ensign\’s Invest in the USA Act.
We\’d like to thank the Senate for having the foresight to overwhelmingly pass this critical piece of legislation, and urge conferees NOT to exclude it from the final version of the Tax bill that goes to the president.
Obviously, we need a tax package that will create jobs and stimulate growth next year. We firmly believe that WITHOUT the Invest in the USA Act, this will be a slower process than it need be. This plan eliminates an abusive tax regulation that encourages U.S. firms to keep their foreign earning overseas rather than bring them back to invest in America.
The way our tax code currently works, if an American firm owns a foreign subsidiary that makes a profit and wishes to pay back those profits to the American firm as a dividend, the dividend is taxed at a 35 percent federal tax rate minus any taxes they\’ve paid abroad. Rather than bring their earnings home to be taxed at this rate, these funds are often left offshore despite better uses at home.
How much money are we talking about? A new study by JP Morgan estimates that U.S. firms are banking over $500 billion overseas rather than pay a punitive tax. JP Morgan also estimates that enactment of H.R. 767 will result in more than $300 billion being brought back to America!
What will companies do with this money?
· Pay down outstanding debt.
· Finance new capital spending projects
· Fund new R&D and venture capital projects.
· Buy back stock.
· Pay dividends – if double taxation ends.
Bringing back $300 billion will boost GDP by .5% in just one year! It will also increase the total national level of capital spending by 2-3 percent over the next two years.
Let\’s get those jobs and that money home….and NOW. Please protect S. 596 in conference.