CHARLOTTE -- I applaud North Carolina Sen. Kay Hagan's leadership to create jobs in the United States by sponsoring the Foreign Earnings Reinvestment Act with Sen. John McCain.
This bold bipartisan legislation would inject up to $1 trillion into our economy by allowing U.S. companies to bring their profits earned overseas at a temporarily reduced tax rate. It is a private stimulus, not funded by the taxpayers, and comes at a time when there are few options left to jump-start our economy. Congress should act now to enact it into law.
Duke Energy alone has $1.2 billion held hostage overseas by a tax system that penalizes U.S. businesses that want to bring their foreign earnings to America to create jobs. With the right changes to our tax laws, we can bring that money home to support and accelerate our capital program investments in smart grid technology, retire and replace older coal plants, and build natural gas and renewable generation.
America has the second-highest corporate tax rate in the world. Our tax system has a strong disincentive to U.S. businesses that want to bring their foreign earnings to America by incrementally taxing these profits - after business has already paid their fair share of taxes to the country where the earnings were generated. We need action now to unlock this cash so it can be put to work here at home.
The current system and the folly it encourages leave U.S. global businesses with three bad choices: bring the money home to the U.S. and endure the exorbitant taxes, leave it in foreign banks overseas or continue to reinvest offshore profits offshore.
Studies show that had we included temporary investment incentives in the 2009 Recovery Act, it would have injected $565 billion into our economy in repatriated earnings, created an additional 2.6 million jobs, including nearly 2.1 million manufacturing jobs, and reduced the federal budget deficit by an average of nearly $46 billion a year over five years.
This was an opportunity missed, and these figures underscore how much we stand to gain by making a different choice today.
History strongly supports this approach. Congress enacted a similar measure in 2004 and it had an overwhelmingly positive impact, including reinvesting more than $300 billion into the American economy, creating jobs, financing new plants and R & D projects, increasing federal revenues, increasing GDP and lowering the unemployment rate.
Our economic recovery has floundered in recent months. Kay Hagan and John McCain are showing extraordinary bipartisan leadership when we need it more than ever. The Foreign Earnings Investment Act is just the shot in the arm our economy needs to create jobs in America to get our economy on the road to a sustained economic recovery.
