North Carolina Sen. Kay Hagan Thursday introduced a bipartisan bill to entice U.S. corporations to bring home offshore profits at a lower tax rate a move she said could help jump start a stagnant economy.
At a news conference with Republican Sen. John McCain, Hagan said that by offering a tax holiday, temporarily lowering corporate taxes from 35 percent to 8.75 percent or lower for offshore profits, it could encourage companies to hire more American workers.
"More than $1 trillion of American company earnings are stranded outside of America where it is not doing one bit of good for the American economy," Hagan said. "Companies with a North Carolina presence have roughly $200 billion sitting overseas. I want that money back in America and and I want it back in North Carolina." "Our goal," Hagan said, "is enhanced economic growth."
Large multinational corporations such as Cisco Systems, Pfizer Inc., Apple Inc., and Microsoft and in North Carolina Duke Energy and the North Carolina Technology Association, have been lobbying for the measure. A U.S. Chamber of Commerce Study released last month predicted the repatriation tax holiday could result in three million American jobs.
But the idea has drawn skepticism from both the right and the left, with both groups citing studies showing that a similar law in 2004 produced few new American jobs but resulted in greater shareholder profits. The Hagan-McCain proposal drew fire from both the conservative Heritage Foundation and the liberal Institute for Policy Studies.
Senate Majority Harry Reid of Nevada said the corporate repatriation proposal would likely not be considered as a stand-alone bill, but would be folded into legislation dealing with infrastructure needs, Bloomberg News reported.