Recent reports indicate thatSpeaker of the House John Boehner and House Majority Leader Eric Cantor aredebating whether to include a repatriation holiday in the legislative packageto extend the payroll tax cut and jobless benefits.
They’vealso been on opposite sides on the issue of repatriation — corporationsbringing foreign profits back to the U.S. at lower tax rates. Cantor has beenvocal in his support for the process, it’s a favorite of K Street and roughly aquarter of the Republican Conference has signed a letter supporting the idea.
ButBoehner is staunchly opposed to tacking it onto the year-end agreement — theoptics would be terrible, he thinks, since the CongressionalBudget Offices says it adds tens of billions of dollars to the budget.Suddenly, a bill that cuts money would become one that adds to the deficit.
NTU has long been anadvocate of fundamental corporate tax reform – lowering the rate andinstituting a territorial system. But repatriation – temporarily reducing thetax rate on foreign earnings - is a positive interim step that would bringinvestment back to our shores and provide a shot in the arm to our ailing economy.Indeed, a recentexamination by former CBO Director Douglas Holtz-Eakin on behalf of theChamber of Commerce found that repatriation could raise GDP by $360 billionover two years and add 2.9 million new jobs to the economy.
But taxpayers wouldn’t bethe only ones to benefit by opening a temporary repatriation window. A Auguststudy by former Clinton advisor, Dr. Robert Shapiro, has found thatrepatriation could provide a significant boost to the U.S. Treasury as well.His research found that contrary to the “terrible optics” that Rep. Boehnermentioned, repatriation would produce revenue gains of $8.7 billion over 10years, compared to the Joint Committee on Taxation’s estimate of a 10-year costof $78.7 billion.
It’s a win-win for taxpayers and Washington, for thejob-focused and deficit-hawks, and for Republicans and Democrats alike. Now isnot the moment for intra-party squabbling. It’s time to provide businesses withsome relief from our uncompetitive tax rates by including repatriation in any year-endextenders package that House Republicans send to the Senate.