By Bernie Becker and Kevin Bogardus - 04/24/12 12:04 AM EDT
A coalition pushing for a corporate tax holiday has rolled back its lobbying efforts, according to one of the companies involved in the campaign.
A spokeswoman for Cisco, one of the largest supporters of a tax holiday, told The Hill that the WIN America Campaign would still meet regularly, even as its lobbying ground to a halt.
The comment from Cisco came after WIN America terminated its relationship with two of its three lobbying firms at the end of March, according to reports filed with the Senate.
But according to one lobbyist, the coalition – which also included Google, Apple, Oracle and other Silicon Valley titans – had essentially decided to “hit the pause button” as campaigning took hold of Capitol Hill.
"I would say it's more on hiatus," said the lobbyist. "If there was an opportunity to move it, the band would get back together and it would rev up again."
Last year, the coalition had gotten behind bills in both the House and the Senate that would allow multinational companies to bring profits stored offshore to the U.S. at a vastly reduced tax rate.
But supporters were also unable to attach a tax holiday to late 2011 proposals to extend the payroll tax cut, something that backers acknowledged made it more difficult for repatriation to get enacted.
Backers of the tax holiday said that, with the recovery still fragile, their idea was one of the few proposals to inject new capital into the economy that had bipartisan support.
But the Democrats and liberal groups that opposed the idea have declared that a previous repatriation holiday, enacted in 2004, did little to spur job creation and that another holiday would encourage multinationals to keep more and more profits offshore.
The Joint Committee on Taxation has also found that a generic tax holiday would add close to $80 billion to the deficit over a decade.
And while Republicans broadly support the repatriation as a policy, top lawmakers in the party have not been on the same page over how to get it enacted.
House Republican leaders split late in 2011 over whether to include a tax holiday in a deal to extend the payroll tax cut, an idea supported by Majority Leader Eric Cantor (Va.) and Kevin McCarthy (Calif.).
But Speaker John Boehner (R-Ohio) and Rep. Dave Camp (R-Mich.), the chairman of the tax-writing Ways and Means Committee, thought that repatriation should be considered in the broader context of tax reform.
Republicans in general also want to shift to a so-called territorial system, which would permanently limit U.S. taxation of offshore profits. Camp released a draft proposal on that topic last year that used repatriation to help pay for that transition.
Still, the WIN America Campaign spent hundreds of thousands of dollars to market the proposal, and its member companies were still lobbying aggressively for a corporate tax holiday in recent months.
Apple, for instance, made another repatriation pitch last month when it announced it would pay a new dividend to shareholders.
"We have expressed our views with Congress and the administration. We think that the current tax laws provide a considerable economic disincentive to U.S. companies that might otherwise repatriate the substantial amount of foreign cash that they have," said Peter Oppenheimer, Apple’s chief operating officer. "That's our view, and we've expressed it."