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Last week, we scored three major and long overdue victories for American workers. First, we closed the tax loophole that encourages corporations to ship jobs overseas. Second, we made investments in job creation by extending successful tax credits that support small business, research and development, biofuels, and workforce development. And third, we passed the America COMPETES Act that provides a big boost to the next generation of American manufacturing and agriculture. We also protected payments to doctors who participate in Medicare and veteran health care programs.
The American Jobs and Closing Tax Loopholes Act is a significant step forward in reforming our tax code to favor job creation and retention at home rather than overseas.
The current tax structure is designed to make sure that multinational corporations are not taxed twice for the same income—once in the United States and once in a foreign country where they operate. Unfortunately, many companies abuse the foreign tax credit and move jobs offshore to completely avoid U.S. taxation. In 2004, U.S. multinational corporations paid an effective U.S. tax rate of just 2% on their $700 billion of foreign earnings, making foreign tax credit abuse one of the IRS’s top compliance concerns for large corporate taxpayers.
For too long, both parties have asked taxpayers to subsidize the very outsourcing that has devastated Southern Virginia and so many working families across America. This bold step puts the American worker first and invests in the next generation of advanced manufacturing. A strong manufacturing sector will be vital to full economic recovery, and closing this tax loophole is a critical step in making sure manufacturing jobs stay here in America.
The America COMPETES Act supports our engineers and entrepreneurs who can create cutting-edge technology and rebuild our devastated manufacturing sector. This effort to rebuild our competitive advantage will include investments in key universities, research facilities, and business support centers throughout Central and Southern Virginia and other hard-hit areas. It also supports STEM education programs that energize science and math education of Americans, so that we can encourage a new generation of scientists and engineers.
My top priority in Congress has been economic relief and job creation for the families of Central and Southside Virginia. This week we took a big step towards reversing the trade and tax policies that have helped to send American jobs overseas and using those resources to invest in tomorrow’s jobs back home. Passage of the American Jobs and Closing Tax Loopholes and the America COMPETES Acts are important steps towards encouraging economic recovery, creating jobs, and rebuilding America’s competitive advantage in the world economy.
Finally, as we celebrate Memorial Day with so many of our brave men and women in uniform deployed in harm’s way, let us thank all those who have served and sacrificed in uniform. In the past year, we have greatly expanded support to veterans and their families, including new programs for family caregivers of disabled veterans, and the implementation of the Post-9/11 GI Bill, under which 240,000 veterans are currently enrolled in school. We continue to fight hard to respond to the health and economic challenges of returning warriors and to honor all who have served.
Please feel free to contact me to share your concerns and ideas. You may call 1-888-4-TOM4US (1-888-486-6487); write to 1520 Longworth House Office Building, Washington, DC 20515; or visit http://www.perriello.house.gov to sign up for my weekly e-newsletter.