New Report on Revenue Effects of Hagan-McCain Repatriation Legislation

Statement

U.S. Senator Kay R. Hagan (D-NC) today commented after the first study to focus exclusively on Hagan's bipartisan Foreign Earnings Reinvestment Act (FERA) with Senator John McCain (R-AZ) was released this morning. The study was prepared by Quantria Strategies for TechNet.

"This newest study argues that our bill would increase federal revenues by $19.1 billion in the first three years after passage. Furthermore, it shows that the legislation would result in a net decrease of Federal income tax revenues of only $9.7 billion over ten years. This finding differs dramatically from an $80 billion loss cited by opponents of repatriation.

"Another recent study by President Clinton's chief economist determined that this policy would result in the creation of between 1.3 and 2.5 million jobs.

"Our stagnant economy demands bipartisan action that can get the economy growing. We should pass this bill.

"Our legislation temporarily drops the barrier that keeps American earnings abroad and encourages U.S. companies to bring this money back into the United States economy right now. The bill temporarily lowers the rate American companies pay when earnings are brought home to an effective rate between 8.75 and 5.25 percent, depending on how the companies use the money. This would bring a trillion dollars back to our shores and would even reduce the deficit in the short-term. It also provides strong incentives for American companies to expand payroll and stiff penalties for eliminating jobs. North Carolina is experiencing a staggering 10.5 percent unemployment rate while the national rate is stuck at 9.1 percent. This is unacceptable and I will keep working to find bipartisan solutions to bring relief to my state and to the millions of Americans who remain out of work.

"Americans are tired of Washington partisan bickering and want to see action. FERA is a commonsense bipartisan proposal that will see up to a trillion dollars returned to the U.S. economy as soon as the bill becomes law."

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