House GOP leaders are split over whether to include a corporate tax holiday in a year-end tax deal.
On one side stand Majority Leader Eric CantorEric CantorA path forward on infrastructure Democrats step up calls that Russian hack was act of war Paul replaces Cruz as GOP agitator MORE (R-Va.) and Whip Kevin McCarthy (R-Calif.), who support approving the measure as part of a tax package before Congress departs for the year.
Speaker John BoehnerJohn BoehnerNunes rebuffs calls for recusal Wounded Ryan faces new battle Bottom Line MORE (R-Ohio) and Rep. Dave Camp (R-Mich.), chairman of the House Ways and Means Committee, stand on the other side of the debate, and their resistance makes it unlikely that a repatriation provision will be included in a year-end package, aides say.
Cantor has voiced increasing doubts that a broad agreement is possible before the 2012 election, and has instead pushed for “incremental” progress on areas of common ground. That includes repatriation, which he believes could allow Republicans to tuck a victory into a year-end package of largely Democratic priorities.
But Camp and BoehnerJohn BoehnerNunes rebuffs calls for recusal Wounded Ryan faces new battle Bottom Line MORE, who famously sought a grand deficit bargain with President Obama over the summer, still have hopes that a broad package can be achieved, and want to deal with repatriation in that context.
“Repatriation is an important idea. I’m for it,” Camp said in May. “I think it’s also going to be an important part of fundamental tax reform.”
Sen. Orrin HatchOrrin HatchCan Trump rebound after failure on healthcare bill? Overnight Finance: US preps cases linking North Korea to Fed heist | GOP chair says Dodd-Frank a 2017 priority | Chamber pushes lawmakers on Trump's trade pick | Labor nominee faces Senate US Chamber urges quick vote on USTR nominee Lighthizer MORE of Utah, the top Republican on the Senate Finance Committee, has also said that while he supports repatriation, he would like to address the issue within the wider scope of tax reform.
And the House GOP freshman class is looking to edge its way into the repatriation debate, with more than 50 first-term Republicans writing their leaders last week to ask for a tax holiday to be passed before they call it a year.
“Repatriation can be seen as a counter to the failed economic stimulus policies from the administration, and would also prevent the American taxpayer from the burden of another trillion dollars in deficit spending,” the letter said.
Reps. James Lankford of Oklahoma and Todd Rokita of Indiana, two of those freshmen, are scheduled to press the case further during a Wednesday conference call.
The conservative Republican Study Committee and the centrist Blue Dog Democrats also support repatriation.
As it stands, American corporations pay their full tax rate — as high as 35 percent — on profits made anywhere in the world, though they do get credits for taxes paid to foreign governments and can defer paying their tax bill on foreign profits until the money is brought to the U.S.
Under prominent tax holiday proposals in both chambers of Congress, companies could find ways to temporarily pay as little as 5.25 percent on repatriated profits.
But skeptics, including many Democrats, have said that a tax holiday enacted in 2004 did little to create jobs and that implementing a second go around would encourage companies to keep an increasing amount of their profits offshore.
Camp, Hatch and other Republicans are interested in moving the U.S. to a so-called territorial system, which would permanently limit American taxation of offshore corporate profit.
“But on the other hand, I’m going to be very interested in what the House decides to do,” Hatch told reporters on Tuesday. “Around here, it’s the art of the doable, sometimes.”