Washington: US Senate Republicans successfully blocked the passage of an anti-offshoring bill that would have denied tax breaks to US companies which move jobs overseas.
Republicans in a 53-45 vote prevented the bill from
overcoming a filibuster. At least 60 votes were needed to
overcome the Opposition`s obstruction.
As per the bill, there will be a ban on government
contractors from using American taxpayers` money to move jobs
offshore.
What is seen as an electoral populist move, the Creating
American Jobs and End Offshoring Act aims at small
manufacturers and included a payroll tax exemption for firms
that move jobs to US, but the bill also contains provisions to
prevent businesses from deferring US taxes on the income they
make from foreign subsidiaries.
Indian IT honchos had said the bill won`t make much of an
impact on India. However, they warned that US companies
operating in other countries may be beaten by the same stick.
Several business groups such as the National Association
of Manufacturers (NAM) were strongly opposed to the
legislation. It had sent a letter to senators arguing the
measure would make US corporations less competitive and hurt
job creation.
Terming the bill as an election gimmick, Republican
senator Orrin Hatch slammed the Democrats for their "height of
irresponsibility" that would put the US economy at "greater
risk."
"Desperate times call for desperate measures and the
majority is showing how desperate they are with a bill that
increases the tax burden on job creators and ship much-needed
US jobs overseas."
Hatch feared that "raising taxes on companies` overseas
profits will just incentivize them to move their domestic
facilities to another country... That is not the prescription
that will cure our ailing economy."
Agreeing with Hatch, senator Chuck Grassley said the bill
would have resulted in a net decrease in American jobs.
"The legislation that was defeated in the senate today
would make US companies pay an extra tax, of up to 35 per
cent, compared to foreign competitors, and really hit
companies like John Deere, where they have big overseas
markets."
The Senator said that the reality of "consequences for
manufacturing jobs" in the US was cast aside to create a
debate for "political demagoguery."
Meanwhile, frustrated after the bill faltered, a Democrat
senator Harry Reid said, "The bill we tried to pass today is
based on simple common sense: to keep American jobs here in
America... but Republicans continued their job-killing agenda
today by protecting these tax breaks for CEOs who offshore
American jobs."
The majority senator claimed that Republican policies
have cost 8 million Americans their jobs. "We should stop
forcing taxpayers in Nevada and across the nation to pay for
giveaways that reward companies for sending American jobs
overseas."
PTI
