House debates tax increases on U.S. multinationals

"You cannot expect to increase jobs in this country when you are increasing taxes," said Ways and Means ranking member Dave Camp (R-Mich.). "It just doesn't work. Yet, that is exactly what the majority is proposing to do in this bill."

Republicans also blasted the bill for only creating government jobs and not ones in the private sector, which provoked a response Rep. Bill Pascrell (D-N.J.). 

"This legislation is about private jobs," he said, adding, "This bill will directly contribute to private-public partnerships that create American jobs."

Today's expected passage of the Investing in American Jobs and Closing Tax Loopholes Act of 2010 sets the bill on an uncertain path in the Senate where leaders there have resisted putting forward legislation that increases on U.S. multinational companies. 

The proposal is part of House Democrats' "Make it in America" agenda, a strategy that seeks to bolster the country's manufacturing sector. 

But the National Association of Manufacturers earlier today came out opposing the bill because its tax increase on U.S. multinationals would hit manufacturers harder than the benefits in the bill would help the industry.

"More than half of all manufacturing employees work for U.S. multinationals," Dorothy Coleman, NAM's Vice President of Tax and Domestic Economic Policy, told The Hill. "So imposing a tax increase on them is not going to help job creation."

Aside from extending the Build America Bonds program, the legislation resuscitates new market tax credits and Recovery Zone Bonds that create incentives for improvements in infrastructure. It also extends emergency assistance to programs like Temporary Assistance for Needy Families, which is slated to expire Sept. 30. 

The bill is paid for in large part by closing roughly $11 billion in foreign tax credits. 

The original intent of these credits was to ensure that U.S. multinational companies did not suffer double taxation. But Ways and Means Chairman Sandy Levin (D-Mich.) said these tax breaks have been abused by companies that use them to offset unrelated foreign income to avoid paying U.S. taxes.   

Many of these tax increases in today's bill were a part of the so-called tax extender bill that passed the House before the July 4 recess, but failed to advance in the Senate.