U.S. Congressmen Robert Dold joined Representatives Kevin Brady (R-TX), Jim Matheson (D-UT), Jim Cooper (D-TN), Devin Nunes (R-CA) and Jared Polis (D-CO) in filing the Freedom to Invest Act of 2011 today. This legislation would temporarily lower tax barriers to encourage American companies with earnings overseas to bring those dollars back to the U.S. for investment.
Currently, more than $1 trillion in capital earned by American companies and workers is stranded overseas because of out-dated tax laws. At 35%, the U.S. has one of the developed world's highest corporate tax rates and a complicated tax structure. It is currently to a company's advantage to keep those profits overseas. The Freedom to Invest Act allows the "repatriation" of those profits at a time when private investment and job growth are needed to strengthen the U.S.'s fragile economic recovery. A similar law passed in 2004 resulted in an inflow of $312 billion in private capital that likely would have stayed abroad otherwise. Companies like Adobe, Oracle and Duke Energy used this cash to create or retain jobs, finance new capital spending and pay down domestic debt.
"I join today in sponsorship of the Freedom to Invest Act of 2011 because we must put America first and act now to bring an estimated $1.2 trillion American dollars home to create jobs and grow our economy," said Rep. Dold."My home district in Illinois is the third largest manufacturing district in the country and my top priority in Congress is to put our Nation on a fiscally sustainable path to give American job creators the confidence to grow their businesses, invest and create jobs," continued Dold. "The time is now to throw open our gates and allow a flood of private sector stimulus to pour into our economy."
"Why, in this weak economic recovery, would we not act now to bring back $1 trillion in stranded U.S. profits back to America for investment?" questioned Brady, the vice chairman and top Republican on the Joint Economic Committee and a senior member of the House Ways & Means Committee. "This is about creating jobs, expanding U.S. businesses and strengthening American companies."
"Our corporate tax rates are the highest in the world and they keep American companies from investing their overseas earnings here in the United States," said Congressman Cooper. "Over $1 trillion is sitting in foreign banks; money that could be used to create jobs and get our economy back on track. To me, this is a no brainer. "
"This bipartisan legislation will bring jobs back home. By encouraging companies to reinvest in America, we can make it in America and create jobs for American workers," said Rep. Polis. "While we still need comprehensive tax simplification with a lower overall rate to help U.S. companies keep their competitive edge, this measure will encourage job creation in Colorado and across America."
Today's legislation also includes a disincentive designed to discourage American companies from repatriating earnings at the lower rate and reducing their workforce.