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Politics : Don't Blame Me, I Voted For Kerry -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (5154)	3/4/2004 9:49:21 PM
From: ChinuSFO	Read Replies (1) \| Respond to of 81568

$300 billion waits to come home PROFITS PARKED OFFSHORE JUST NEED AN INCENTIVE: A ONE-YEAR TAX BREAK Mercury News Editorial With the debate over jobs moving overseas heating up and stock options under attack, there hasn't been a lot of good news for Silicon Valley coming out of Washington lately. That could change soon, if the Senate approves a key piece of legislation that could spur investment and jobs in the Valley and deliver a huge boost to the U.S. economy. The legislation, co-authored by Sens. John Ensign, R-Nev., and Barbara Boxer, D-Calif., would provide an incentive for companies to bring back corporate profits currently parked offshore. The legislation is an amendment attached to a larger corporate tax reform bill that the Senate began debating Wednesday. Estimates by J.P. Morgan and Bank of America suggest that between $300 billion and $400 billion would be repatriated, much of it by tech companies. Under current law, profits from overseas operations are subject to a 35 percent tax when they are repatriated. The Ensign/Boxer amendment would cut the repatriation tax rate to 5.25 percent for one year. Some critics have objected that the tax holiday -- essentially a temporary tax cut -- would make the soaring budget deficit even larger. The authors have addressed that concern: Only profits in excess of those repatriated in an average year are eligible for the tax breaks. That means the bill will generate more revenue -- not less -- for the U.S. Treasury, as companies bring back cash above and beyond what they repatriate in a typical year. Now other opponents are trying to muddy the waters with accusations that the amendment rewards companies for sending jobs offshore. That's nonsense. The foreign profits of U.S. corporations are the result of the overseas sales of American products, many of them made by American workers. And as long as those profits remain overseas, they are more likely to be invested overseas -- think jobs in India and China -- instead of here. The Ensign/Boxer provision passed last year by a resounding 75-25 majority. A similarly strong vote this year would send the following signal to the House of Representatives, where the bill stalled last year: It's about American jobs, stupid. mercurynews.com