Working Hard to Rebuild our National Security, Improve Economic Opportunity & Protect our Constitutional Liberties

Latest News

CQ Roll Call: Paul Ryan's Tax Repatriation Plan Faces Conservative Pushback

f t # e
WASHINGTON, D.C., September 8, 2015 | comments

By: Alan K. Ota

House Ways and Means Chairman Paul D. Ryan, R-Wis., will face competition from conservative rivals as he tries to develop a plan to fund highways with revenue from repatriating $2.1 trillion in corporate earnings held offshore at lower rates than envisioned in the administration's fiscal 2016 budget.

Key conservatives like Roger Williams, R-Texas, are trying to revive plans that would allow corporations to voluntarily repatriate offshore cash at a reduced effective rate while questioning whether Ryan would effectively be imposing a mandatory tax on businesses that can now indefinitely defer U.S. taxes on foreign hearings.

“The government has so many mandatory things. It’s choking businesses to death. That’s why we have an economy that’s struggling,” said Williams. He stopped short of opposing Ryan’s plan, but made clear that he preferred a voluntary approach.

Ryan has been trying to broker a deal with the White House on deemed, or forced, repatriation as part of a broader international tax overhaul that would provide about $90 billion in general revenue for the House version of a surface transportation bill. The Senate-passed six-year highway bill (HR 22) that includes about $45 billion in offsets, enough to cover the annual shortfall in the Highway Trust Fund for three years.

Williams, a reliable member of House Republican Whip team, predicted that a voluntary repatriation plan would encourage companies to “bring it back” without any compulsory requirements.

He has been promoting a new Bring Jobs Home to America Act proposal (HR 3086) that would provide a permanent 5 percent rate for any foreign earnings that companies elect to repatriate.

Rep. Bill Flores, R-Texas, chairman of the Republican Study Committee, said he planned to study the Williams bill and predicted there would be some disagreement among conservatives about whether to support deemed or voluntary repatriation.

"We will have a pretty good debate on it. We need to discuss both alternatives," Flores said. In order to win the support of conservatives, Flores said Ryan likely would need to limit the scope of deemed repatriation to ensure that it does not cover "non-repatriated profits" that are invested in fixed assets such as plants and equipment.

"We've got to be careful," Flores said.

Ryan and his allies have pushed back against voluntary plans, noting that they are expected to result in net revenue losses – not gains – over the 10-year budget window. For example, a temporary voluntary repatriation plan offered by Sen. Rand Paul, R-Ky., with a 6.5 percent tax rate, would cost $118 billion over 10 years, according to the Joint Committee on Taxation.

But Paul, Williams and other conservatives have argued that formal scores of voluntary repatriation proposals do not accurately measure their effect on federal tax collections. “I believe it would raise revenue,” Williams said.

While sparring over revenue estimates, Williams and other conservatives are hoping to gain traction for voluntary repatriation in the coming days.

For example, Rep Mark Meadows, R-N.C., has pushed a proposal (HR 2225) for a 5.25 percent rate on dividends paid by controlled foreign corporations. The revenue would be apportioned in three equal parts to reducing the deficit, supporting the Highway Trust Fund and raising the discretionary defense spending cap.

Rep. Trent Franks, R-Ariz., has lined up with Sen. John McCain, R-Ariz., to promote a Foreign Investment Act proposal (HR 788) to provide an effective 8.75 percent rate for repatriated foreign earnings. The rate would be reduced to 5.25 percent for companies that demonstrate they are expanding their payroll by 10 percent.

For his part, Ryan has made the case for cutting a deal with the administration on deemed repatriation as part of a broader international tax overhaul aimed at lowering taxes on foreign business operations. Some conservative groups like the Americans for Tax Reform, an anti-tax advocacy group, have held their fire, waiting to see whether Ryan’s broader plan will comply with the no-new-taxes pledge taken by many Republicans.
(subscription) 

To read full article click here
f t # e

Connect with Congressman Flores on Facebook

Pretty cool flash mob!

Connect with Congressman Flores on Twitter

RT @BaylorProud: It took 6 months for #Baylor grad Samuel Azide to plan this flash mob marriage proposal. It was worth every second: https…

U.S. DEBT CLOCK
Outstanding Public Debt as of Jun 29, 2017 at 11:48 AM EST