Schakowsky: Tax Credits should go to Companies that Invest in American Workers, Not Ship Jobs Overseas

Press Release

Rep. Jan Schakowsky (IL-09) today held a news conference to announce legislation that will create a tax credit for companies that provide fair wages and good benefits to workers, while closing a loophole that allows corporations to claim tax savings for activities such as building a manufacturing plant overseas.

The Patriot Employer Tax Credit Act of 2015would reward companies that invest in American jobs, pay fair wages, provide quality health insurance and retirement savings, support service members and veterans, and create a diverse workforce. Rep. Jan Schakowsky will introduce the Patriot Employer Tax Credit Act in the House in early June. Senator Dick Durbin (IL) could not participate in the press conference because of votes in the Senate, but will soon introduce the Senate version of the legislation.

Rep. Schakowsky discussed the initiative at Block Steel, a local company that would benefit from the legislation.

"We must stop rewarding corporations that ship jobs overseas, underpay their workers and offer inadequate benefits," Schakowsky said. "Instead, we can reward patriotic employers, like Block Steel here in Skokie. The jobs here at Block Steel pay a living wage, provide quality health benefits and ensure workers can retire with dignity. Employers that provide these jobs should get tax credits, and our legislation pays for these tax credits in the best way possible -- by closing tax loopholes for corporations that ship jobs overseas."

"This legislation being promoted by Congresswoman Schakowsky and Senator Durbin is good policy that will benefit both workers and business owners, and support growth of the American economy for all," said Block Steel President Joe Block.

"Instead of rewarding businesses that ship jobs overseas we should reward companies that invest in their workers by providing fair wages, health insurance and retirement benefits," Durbin said. "What sense does it make to hand $50 billion in taxpayer money to companies that export American jobs? When Congress moves to consider tax reform we should ensure that tax benefits are targeted to the companies that contribute the most to U.S. workers and our economy, not corporations that ship jobs overseas."

The Patriot Employer Tax Credit Actwould grant a tax credit of about $1,200 per U.S. employee to companies that meet the following criteria:

Invest in American Jobs: Maintain headquarters in the U.S. if the company has ever been headquartered in America, has not inverted to avoid U.S. taxes, maintain or increase the number of workers in the U.S. compared to the number of workers overseas, and does not decrease the number of workers through the use of contractors.

Pay Fair Wages: Pay at least 90% of U.S. workers an hourly wage equal to 156% of poverty for a family of three (about $15 dollars per hour)

Provide Quality Health Insurance: Offer Affordable Care Act-compliant health insurance to employees.

Prepare Workers for Retirement: Provide 90% of non-highly compensated U.S. employees a defined benefit plan or a defined contribution plan with an employer contribution or match equal to at least 5% of worker compensation.

Support Our Troops and Veterans: Pay the difference between regular salary and military compensation for all National Guard and Reserve employees called for active duty and have a plan in place to recruit veterans.

Create a Diverse Workforce: Have a plan in place to recruit employees with disabilities.
Companies with fewer than 50 employees, who face different business circumstances than larger corporations, can qualify for the tax credit by fulfilling a subset of these criteria.

To offset the cost of the Patriot Employer Tax Credit, the legislation would close a $50 billion tax loophole that allows corporations to deduct interest expenses used to invest overseas--such as the interest costs of building a manufacturing plant overseas or shipping materials abroad--while allowing the company to defer paying taxes on income derived from those investments until it is repatriated.

Under this legislation, Block Steel -- a family-owned company that employs more than 75 people -- would qualify for about a $100,000 tax credit. The company is the nation's largest aluminized steel distributor and has been located in Chicagoland for more than 65 years.

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