I yield myself such time as I may consume. (Mr. BOUSTANY asked and was given permission to revise and extend his remarks.) Mr. Speaker, everyone in this Chamber salutes the heroic actions of those…
I yield myself such time as I may consume.
(Mr. BOUSTANY asked and was given permission to revise and extend his remarks.)
Mr. Speaker, everyone in this Chamber salutes the heroic actions of those countless brave Americans, both first responders and ordinary citizens, who put sacrifice over self in responding to the tragic events of 9/11. In the wake of unspeakable tragedy in New York City, at the Pentagon, and in Shanksville, Pennsylvania, we also saw America at its best.
Now, we have already heard considerable debate today, passionate debate, about the new health care entitlement this bill would create, and I think reasonable people can disagree about whether that program, that particular entitlement is appropriate. But I want to focus my remarks on the other part of this bill and on the unfortunate decision of our friends in the majority to pay for this legislation with a highly controversial tax increase on employers that our economy and our workforce simply cannot afford.
Mr. Speaker, the bill would impose a $7.4 billion tax hike on U.S. businesses that happen to be headquartered overseas but that create good, high-paying American jobs right here at home in communities across this great country. These ``insourcing'' companies provide significant employment in the United States, with many of these jobs in the manufacturing sector.
This tax increase will make it less attractive for many of these insourcing companies to initiate or expand operations here in the United States, potentially encouraging them to ship these jobs overseas. With the unemployment rate hovering near 10 percent
and businesses across the country continuing to struggle to meet payroll, now is the worst possible time for a tax hike on employers that will cost us more jobs.
This is not the first time House Democrats have tried to enact this particular tax hike, and it probably won't be the last. That is because even the Senate, Senate Democrats, continue to reject it, since it would not only cost jobs, but also violate our international treaty obligations. Even the Obama administration's own Treasury Department has testified before the House Ways and Means Committee that it ``has concerns about the specifics of this provision and whether it will override many of our income tax treaties.''
Mr. Speaker, all of us, all of us in this Chamber recognize the hardships experienced by those brave Americans who responded to the events of 9/11. But a tax increase on employers that will cost other Americans their jobs is not the answer. We could have done this in a bipartisan way, but it is unfortunate we are not there today. I urge my colleagues to reject this harmful, misguided tax increase.
I reserve the balance of my time.
Mr. Speaker, I yield myself such time as I may consume
I am from Louisiana and we are no stranger to tragedies, but this is being presented on the other side as an either/or proposition. The bottom line is we could have actually done better, we could have done better, and I am deeply concerned about those who will lose their jobs as a result of these tax provisions. It is important to recognize that.
Don't just take my word for it. I have three letters here that I want to enter into the Record. These were addressed to the House Ways and Means Committee leadership. One is from the Organization For International Investment, a second from the U.S. Chamber of Commerce, and a third from the National Foreign Trade Council, all of which highlight the potential for significant job loss.
As a physician I can say one of the first maxims I have always followed is first do no harm. We could have done better, Mr. Speaker.
Organization for
International Investment,
September 29, 2010.
Hon. Sander Levin,
Chairman, Committee on Ways and Means, House of
Representatives, Washington, DC.
Hon. Dave Camp,
Ranking Member, Committee on Ways and Means, House of
Representatives, Washington, DC.
Dear Chairman Levin and Representative Camp: On behalf of
the Organization for International Investment (OFII), I am
writing to express continued concern with section 301 of the
James Zadroga 9/11 Health and Compensation Act (H.R. 847).
While we recognize the need for revenue, we must oppose this
provision as an offset because it represents a clear and
harmful override of our existing U.S. income tax treaties.
Although positive changes were made to this proposal since it
was originally introduced as an offset to the 2007 Farm Bill
(H.R. 2419), OFII remains opposed because it still uniquely
discriminates against U.S. subsidiaries of companies
headquartered abroad and clearly violates many of our
international agreements.
OFII is the largest association of U.S. subsidiaries of
companies headquartered abroad. U.S. subsidiaries play an
important role in the growth and vitality of the U.S.
economy. They provide high-paying jobs for over five million
Americans and account for almost one-fifth of all U.S.
exports. A discriminatory tax increase sends a negative
signal to international investors and may dissuade these
companies from choosing the United States as a location for
job creating investment.
As drafted, this proposal would unilaterally override many
of our bilateral income tax treaties and could lead to
retaliatory actions by other countries or withdrawal by our
treaty partners from existing treaties, negatively impacting
international business transactions. The Senate has opposed
this and similar provisions twice in the past two years for
these reasons.
Congress has not held any hearings to examine this issue
and whether the proposal is the appropriate remedy to address
any perceived concerns. In this regard, there is no evidence
that existing safeguards, including the substantial and
restrictive anti-treaty shopping provisions (so-called
``Limitation on Benefits'' (LOB) provisions) contained in
most of our current U.S. income tax treaties, are
ineffective. Further, if material tax abuses were evident,
the Treasury could implement changes to the U.S. Model Tax
Treaty that would avoid the negative consequences of
violating our international agreements.
Since a similar proposal was introduced in 2007, the
Treasury has taken great strides to update the three
bilateral tax treaties without LOB provisions (Iceland,
Hungary, Poland).
A protocol adding an LOB provision to the Iceland treaty
was negotiated by Treasury and ratified by the Senate in
2008. A similar protocol with Hungary has been negotiated and
initialed and could be ratified this year. Treasury is
expected to pursue a similar amendment to the treaty with
Poland during 2010-2011.
Consistent with the conclusions in the Treasury Report that
was released in November 2007 that reviewed potential abuse
of income tax treaties, OFII believes re-negotiation of
existing income tax treaties without LOB provisions is a more
appropriate way to address the concerns underlying this
provision and we urge you to oppose including this provision
in the final version 9/11 Health and Compensation Act. We
would be glad to discuss our concerns with your staff in
greater detail.
Sincerely,
Nancy L. McLernon,
President & CEO.