Question: What efforts are you making to stop the trend of U.S. jobs moving overseas?
The forecast for our economy is bright. More than 1.4 million jobs have been created in the last 10 months. Unemployment rates continue to decline. Here in Nevada, we are leading the nation in job creation. But as befits the entrepreneurial spirit of this country, good news does not mean we should stop promoting growth or pursuing policies that reach for more success.
I have introduced bipartisan legislation that will ride the wave of growth we are currently experiencing and take us to even greater heights. My plan will infuse $400 billion to $600 billion into our economy and create between 660,000 and 1 billion new jobs. It sounds like quite a feat, but it is exactly what economists have predicted will happen under my legislation called the Invest in the USA Act.
After meeting with executives of high-tech companies in Silicon Valley, I learned of the frustration of many multinational companies with revenue sitting overseas. They are currently subject to significant tax penalties – up to 35 percent – for bringing revenue back to the United States to invest.
Well over half a trillion dollars has been accumulated in bank accounts of U.S. companies overseas because of the tax rates that would be charged on that money if it were brought back to the United States. Rather than leaving 35 cents of each earned dollar on the table, they leave this money abroad – creating jobs on foreign soil.
U.S. companies are at a clear disadvantage when it comes to bringing their money home. For example, if a U.S. company goes to China and earns income there, when it brings that money back to the U.S., it has to pay up to a 35 percent tax rate on the money it returns. If a company from France goes to China and makes money over there, and it brings the money back to France, it pays zero in taxes. Germany also charges zero percent; Canada, zero percent; Australia, zero percent; and Great Britain, zero percent. These countries have recognized the positive impact of encouraging companies to bring this money back into their home country.
We must recognize this reality as well. The $400 billion to $600 billion that the Invest in the USA Act would return to our shores would be used to: create more jobs for American workers; solidify pension and retirement funds; and increase investment in manufacturing equipment, research and development. It is common sense that we would be better off with that money here rather than leaving it overseas where it will only help build and grow foreign economies.
One of the main reasons I left my veterinary practice to run for Congress in 1993 was that I was frustrated that our government had created too much of a tax burden on American companies and American families. Too many of the government’s tax policies were, and remain, devoid of common sense. A policy that tells American companies that they will be penalized for reinvesting in America certainly falls into that category.
And it’s not just common sense – various studies have been conducted regarding this important issue. Alan Sinai is one of the most respected economists in the United States. His conservative estimate is that a minimum of 660,000 jobs would be created by this single piece of legislation. He also estimates that $75 billion in deficit reduction would occur.
So, how do we get those U.S. companies to bring their money home? My proposal, which passed the Senate as part of the Jumpstart Our Business Strength (JOBS) bill and is awaiting action in the House of Representatives, lowers the tax burden on foreign subsidiary income to 5.25 percent for one year and opens the floodgates for privately held foreign funds to be brought back into the American economy to provide immediate economic stimulus.
Invest in the USA offers only a temporary window for companies to return their money at the lower tax rate. However, I want to use the success of this program as a model to show that more comprehensive reform of our international tax system can create more jobs on American soil in this growing global economy.
American jobs depend on strong, healthy American companies. The Invest in the USA Act will strengthen companies and generate incredible opportunities for economic growth. It would be a shame for us to continue encouraging that growth in foreign countries. Let’s give U.S. companies a level playing field and make American jobs our top priority.
