Congressman Jim Matheson said he welcomes the upcoming address on the economy and jobs from the President to Congress Thursday. But Matheson said he’d like to hear support in the speech for a proven idea included in a bill Matheson has introduced to grow the private sector and encourage employment.
“Across business sectors ranging from technology to professional services, U.S. corporations lead the world in innovation. But a disincentive in our tax code prevents billions of dollars in private sector foreign earnings from returning here to be plowed back into the domestic economy,” said Matheson. “We can do some good now for American employers and for the U.S. taxpayer, rather than do nothing by maintaining the status quo.”
Matheson has introduced legislation (HR 1834) that would temporarily allow companies who return any foreign profits—above and beyond what they would ordinarily return—to be taxed at a fraction of the current 35% corporate tax rate. Similar legislation was enacted in 2004. According to several independent studies, the policy resulted in billions of dollars of reinvestment into American companies and significant revenue to the U.S. Treasury.
“Economists estimate that nearly $1.4 trillion is held abroad. If my bill passes, as much as 70% of that will likely be returned to the U.S. That’s money that will strengthen private sector balance sheets, provide funds for research, to reduce business debt and increase hiring. It’s a win-win for economic growth and deficit reduction. It should be part of the agenda going forward,” said Matheson.