AMERICAN JOBS CREATION ACT OF 2004 -- (Extensions of Remarks - June 18, 2004)
HON. RON KIND
IN THE HOUSE OF REPRESENTATIVES
Thursday, June 18, 2004
Mr. KIND. Mr. Speaker, over the past year, I, along with many other Members of Congress from both sides of the aisle have been pushing for congressional action to fix the international trade dispute over the extraterritorial income (ETI) and Foreign Sales Corporation (FSC) programs. We have a bipartisan, fully paid-for remedy that would reform these tax provisions, put the United States tax code in compliance with the World Trade Organization (WTO), and reduce the tax burden on American manufacturers and farmers. Unfortunately, the Majority leadership ignored this bipartisan approach in favor of a budget-busting, controversial bill that does little for small manufacturers in Wisconsin and includes multiple provisions completely unrelated to the trade problem we need to fix immediately.
Because of the House majority's previous inaction on reforming the FSC-ETI trade dispute, the European Union (EU) continues to ratchet up tariffs on nearly 100 categories of U.S.-produced exports. This costs American businesses and workers by making our products less competitive in the major European market. Unless we reform the FSC-ETI tax provisions, EU tariffs on American products will continue to climb, potentially costing American exporters over $4 billion.
With over 2 million American manufacturing jobs lost since 2001, it is critical that we act to reverse this trend by eliminating incentives for American jobs to be sent overseas and working to end trade barriers that hurt American exports. Anticipating the EU tariffs, Congressmen CRANE, RANGEL, MANZULLO, and LEVIN introduced bipartisan legislation last year to address the FSC-ETI trade dispute. H.R. 1769, the Jobs Protection Act, would have eliminated the American tax breaks found in violation of WTO rules, and reinvested the savings back into American manufacturers by reducing their tax rates. I, along with 175 other Members of Congress, cosponsored this legislation and have pushed for the House to consider this legislation.
Despite this bipartisan compromise, the Majority leadership has brought to the Floor today a piecemeal, fiscally irresponsible bill that is filled with special interest breaks and will increase already record budget deficits. Further, the major provisions of H.R. 4520 provide over $30 billion in tax incentives for large multinational corporations while providing little to no tax relief to small and medium-sized manufacturers, farmers, and unincorporated businesses. The Republican chairman of the House Small Business Committee has expressed his opposition to this legislation because it fails to include smaller non-Chapter C corporations in its manufacturing benefit.
Because of strong bipartisan opposition to H.R. 4520, the majority has attached 400 pages of additional tax reforms, complications, and unrelated add-ons that dilute from our important mission to fix the FSC-ETI trade dispute, add tens of billions of dollars to the budget deficit, and curb potential investment in our manufacturing sector.
Some of the additional provisions included in H.R. 4520 are items that I have consistently supported including a temporary incentive to repatriate overseas profits in the United States, and extensions of important tax benefits such as the research and development tax credit, wind and biomass electricity production credit, Work Opportunity tax credit, and small business expensing rates. I am hopeful that these items can be acted on by the House separately from this unacceptable legislation.
The substitute authored by Congressman RANGEL was based on the bipartisan FSC-ETI reform bill, H.R. 1769, and would have included extensions of the R&D tax credit, renewable energy production credits, increased small business expensing provisions, tax deductions for teachers, and other important tax provisions. Further, the substitute would provide better treatment of small businesses, farming cooperatives, and domestic manufacturers, while not adding to the federal budget deficit. Unfortunately, the Majority leadership did not even allow debate on the Rangel substitute fearing it would gain wide bipartisan support and displace the unrelated provisions included in H.R. 4520.
Mr. Speaker, with 2.7 million American manufacturing jobs lost over the past years, including over 80,000 in my home state of Wisconsin, we should not be playing partisan games on the House floor. We should be considering legislation that will end European tariffs on American exports, helps domestic farmers and manufacturers be more competitive, closes abused corporate tax loopholes, and does not burden our children with huge amounts of debt that they will have to pay off in the future. The Rangel substitute would do all these things. I urge my colleagues to oppose H.R. 4520 in its current form so that Congress can move forward on responsible ETI-FSC legislation.