Business groups and lobbyists see opportunity for a repatriation tax holiday as Congress and the White House search for ways to create jobs.
Advocates have made little headway pushing the tax holiday so far this year but remain adamant that a temporary tax break on foreign earnings would help jolt the U.S. economy back to life.
That report follows a similar study released last month by liberal-leaning NDN that also argued for a repatriation holiday.
Other groups across the political spectrum have started to push for fewer taxes on U.S. companies’ foreign-made profits, including the U.S. Conference of Mayors. The idea has also gained traction with White House hopeful Mitt Romney (R), who included it in the economic plan he released this week.
Supporters of a tax holiday say there is optimism among their ranks that lawmakers will grab onto the idea to stimulate the economy before the year is out.
“Would you rather have your money in France or here? That’s an easy call,” said Kenneth Kies, managing director of Federal Policy Group. “There’s nothing else that the president or anyone else can do to have an immediate impact on the jobs front.”
Kies lobbies for a number of corporate clients that are in favor of such a holiday.
Letting companies bring back their foreign-made profits with relatively little taxation has been met with skepticism, however. Liberal groups argue that a similar repatriation tax holiday, enacted by Congress in 2004, did little to create jobs because companies returned the funds to their shareholders in stock dividends and buybacks.
The Obama administration has also voiced opposition to the proposal. House Republicans including Majority Leader Eric CantorEric CantorTrump allies warn: No compromise on immigration Chamber of Commerce overhauls lobbying operation Laura Ingraham under consideration for White House press secretary MORE (R-Va.) and Rep. Kevin BradyKevin BradyMedicare looms over Trump-Ryan alliance Republicans want to grease tracks for Trump Unemployment drops to 4.6 percent MORE (R-Texas) of the House Ways and Means Committee have vocally backed it.
One advantage that a proposed repatriation tax holiday has is strong K Street support, especially from the tech industry.
“Our companies are still saying this is the most simulative thing you can do for the economy. This could help bring $1 trillion back into the U.S.,” said Ralph Hellmann, senior vice president of government relations of the Information Technology Industry Council.
One of the most prominent groups lobbying on repatriation is The WIN American Campaign, which includes member companies like Apple, Google, Microsoft and Pfizer.
The coalition has hired two lobby firms — Capitol Counsel and Cauthen Forbes & Williams — and has spent $230,000 on lobbying for the first six months of this year, according to lobbying disclosure records. Former Rep. Jim McCrery (R-La.), once ranking member of the House Ways and Means Committee, is among a number of registered lobbyists for the coalition.
Doug Thornell, a consultant at SKDKnickerbocker and a senior adviser to the coalition, said the group is optimistic that Congress will move on passing a repatriation tax holiday this year.
“There are just not that many ideas out there that would inject this kind of money into the economy and cost taxpayers next to nothing,” Thornell said. “We’re in a much different place than we were five months ago. There’s much more support for this now.”
Lobbyists also argued that moving on the tax holiday could help achieve a long-held goal of the White House as well as many in Congress: corporate tax reform. They say it fits into moving the United States towards a “territorial” tax system where only profits made in the country would be taxed.
“Repatriation is a bridge to tax reform. It’s a further concession that the tax system that we have is outmoded and out of date,” Kies said.