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house Bill H.R. 961

Making a Tax Loophole for Offshore Corporate Profits Permanent

Argument in favor

Promotes global expansion of U.S. companies. Congress routinely passes these types of tax-extender bills without providing revenue offsets. Ends costly uncertainty to businesses in regard to tax issues.

Mark's Opinion
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03/03/2016
If the money is earned outside the US why should the US ever be entitled to tax it? That be like a state forcing you to pay sales tax on purchases made in France.
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Ryan's Opinion
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01/26/2016
The problem is not the companies. The problem is this federal government. America has the HIGHEST corporate tax rate in the WORLD! I don't blame corporations for moving their money offshore! You really want them to com back, get ride of the corporate tax all together. See what happens then.
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Patrick mike's Opinion
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12/04/2016
Those who oppose this bill need to educate themselves on "fiduciary responsibility". If companies pay taxes to the host country where the money is earned & spent, it is NOT taxable money. This principle is not a "loophole". It's nearly universal in international commerce. Trump's plan to repatriate this money at a lowered rate makes far more sense than driving these corporations to move in their entirety to another country.
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Argument opposed

Motivates U.S.-based multinational corporations to keep profits out of the U.S. Disproportionately benefits the rich. Moves jobs out of the U.S. Reduces federal income by almost six billion a year for the next ten years.

Steven's Opinion
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02/29/2016
Between corporate welfare, tax loopholes and outsourcing labor overseas business pay very little in operating cost. And contribute little to nothing to the system that propped them up and made them rich. Not just no but hell no!
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BTSundra's Opinion
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12/16/2015
This would be the final nail in the coffin for American enterprise. We should aggressively bring these companies back to the United States, as well as switch to a flat tax.
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Mickb's Opinion
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02/27/2015
We need to be closing loopholes, not making them a permanent piece of governance.
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What is House Bill H.R. 961?

This resolution would allow certain companies to permanently avoid paying U.S. corporate income taxes on foreign profits, as long as the companies keep those profits abroad.

The bill would apply to companies in the businesses of banking, financing, securities dealing, or insurance.

This exception was temporary and expired at the end of 2014; the bill would backdate the permanent exception to 12/31/14, meaning some companies would receive the money they paid in taxes back. 

Impact

Banking, financing, securities, and insurance companies that profit in other countries; the U.S. federal government.

Cost of House Bill H.R. 961

$78.00 Billion
The CBO estimates that enacting the bill would reduce tax revenues, thus increasing federal budget deficits by about $78 billion over the 2016-2025 period.

More Information

In Depth: Sponsoring Rep. Patrick Tiberi (R-OH) explained in a press release that his bill would:
"help maintain a level playing field with foreign competitors by applying to financial services companies the same general rule that defers current U.S. tax on other active trade or business income. Without the active financing exception rules U.S. companies would be less competitive and jobs here at home would be jeopardized."
Of Note: Rep. Tiberi has introduced this legislation before. In 2013, he introduced the bill, which cleared committee but never reached a vote on the floor of the House.

Before the tax exemption originally expired, many companies with foreign profits avoided taxes. According to a 2012 Business Insider article:
"American multinational corporations have more than $1.7 trillion in undistributed foreign earnings — some of which is deliberately held offshore to defer taxation — and taken as a whole, keep at least 60 percent of their cash overseas". 
Media:

AKA

Permanent Active Financing Exception Act of 2015

Official Title

To amend the Internal Revenue Code of 1986 to permanently extend the subpart F exemption for active financing income.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house has not voted
      house Committees
      Committee on Ways and Means
    IntroducedFebruary 12th, 2015
    Between corporate welfare, tax loopholes and outsourcing labor overseas business pay very little in operating cost. And contribute little to nothing to the system that propped them up and made them rich. Not just no but hell no!
    Like (19)
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    This would be the final nail in the coffin for American enterprise. We should aggressively bring these companies back to the United States, as well as switch to a flat tax.
    Like (15)
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    We need to be closing loopholes, not making them a permanent piece of governance.
    Like (13)
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    It motivates U.S.-based multinational corporations to keep profits out of the U.S. and moves jobs out of the U.S. Moreover, it reduces federal income by almost six billion a year for the next ten years, while increasing the federal budget deficit by about $78 billion during the same period. How is that good for the economy?! I agree with Countable member LibertyForAll's statement: "... By simplifying the US tax code to a Flat Tax of 14.5%, it will undoubtedly bring fleeting tax dollars and businesses back to the US. Resulting in job creation, new capital for investment and levying the American people back into economic prosperity."
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    Intellectuals don't simply look at the reactions of these Corporations... But yet what they're reacting too. Witch is a 70k tax code. By simplifying the US tax code to a Flat Tax of 14.5%, it will undoubtedly bring fleeting tax dollars and businesses back to the US. Resulting in job creation, new capital for investment and levying the American people back into economic prosperity.
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    This bill makes me scratch my head. How is it a good idea to provide benefits for companies to go outside of the United States and hire international employees to do offshore drilling. I hope that lobbyists realize that helping out your "buddies" over at these oil companies, isn't going to make America better, it's just going to make it even worse.
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    If the money is earned outside the US why should the US ever be entitled to tax it? That be like a state forcing you to pay sales tax on purchases made in France.
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    Close all tax loopholes!
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    Are you totally insane? No! No! No!
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    Have you people even realize what is written in the Constitution! This how we are to pay for operations of the federal government without this where is this tax money coming from? Well let me tell you! the taxpayers! On top of all this how is a mom and pop operation going to be able to compete! Our roads are being destroyed and our jobs being lost to foreign countries due to this unfair tax loopholes and I think all representatives who vote for this should be voted out of office!
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    Lol.... Wow lawmakers and politicians do not even hide the fact that Americans are getting rooted. Yeah let's give corporations more incentive to find every conceivable way to skirt our tax laws. Meanwhile the average tax payer, pays what he or she owes, because they don't have corporate lobby. This country is hurting.. Both left and right, when do the citizens of our country get their voice heard. Damn sure our reps. I am very tired of these masters of the universe type A personalities ruining the country for a bottom line. Washington D.C. Has lost its claim on the center of democracy, bills like this one prove the point. It is such a shame we let these people run our government. Totally repugnant politicians and business. Why don't we just put corporate sponsorships on each part of the three branches of the government. We could even use tax dollars to dress the senate and house members in corporate clad logos. At least this way the American public knows who is responsible for their asses hurting
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    We need to make the U.S. friendly to business. Stop punishing businesses.
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    Let us instead lower the corporate tax rate to draw companies back to the US, and keep those companies that haven't left here.
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    Just imagine if Apple kept their money and manufacturing in the U.S. They hid billions in Irish banks.
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    Two words, Flat Tax.
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    This is such a terrible idea. It promotes the economically disastrous industry idea of the US being a cash cow. If they expect us to spend the time, consideration, and money on them, they should be spending time, jobs, and money on us too.
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    The problem is not the companies. The problem is this federal government. America has the HIGHEST corporate tax rate in the WORLD! I don't blame corporations for moving their money offshore! You really want them to com back, get ride of the corporate tax all together. See what happens then.
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    Messing with profits a multinational makes in overseas operations serving overseas operations no other nation regards as moral. Only the USA could get away with that kind of theft and only in the short run. The proper way to entice business activity back into the USA would return to a Capital Gains taxation rate equalling the lowest of our trading partners and convincing the business community it would stay that way for a decade or more. After which you might see the economy recover and expand to make up the revenue shortfall as Laffer and Reagan did.
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    Taxes need to be returned to the US as well as the profits of these corporations.
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    Hell no!!!
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