Norquist, Chamber press for repatriation

Currently, American corporations pay their full tax rate – as high as 35 percent – on profits made anywhere in the world. Companies do get credits for taxes paid to foreign governments.

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Under tax holiday bills already introduced in this Congress, corporations could temporarily pay as low as 5.25 percent on offshore profits. Proponents of the idea have said it is one of the few current proposals with bipartisan support in Congress.

Most other market economies also have in recent years switched to a so-called territorial tax system, which essentially taxes only corporate profits made within a country’s borders.

The 30 groups and others lobbying for a repatriation holiday, like the WIN America Campaign, have said that a repatriation holiday could serve as a steppingstone to a territorial system.

Rep. Dave Camp (R-Mich.), the chairman of the House Ways and Means Committee, has unveiled a draft proposal for a territorial system, as he pushes to comprehensively overhaul the U.S. tax code. Camp’s proposal would use repatriated funds to help pay for the switch to a territorial system.

In their letter, the 30 groups also said that a previous tax holiday, enacted in 2004, was successful. But critics like Sen. Carl Levin (D-Mich.) disagree, declaring that repatriated funds were used more for stock buybacks than job creation.

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