Still, it remains to be seen whether repatriation can find a vehicle for passage in December, as lawmakers already have the payroll tax cut, unemployment insurance, the Medicare doc fix and an appropriations omnibus on their plate.

Repatriation backers, who have put on a full-scale lobbying effort, had hoped the supercommittee would take up their issue. But the panel failed to craft at least a $1.2 trillion deficit-reduction plan.

{mosads}Under bipartisan repatriation bills in both the House and the Senate, multinationals could find ways to temporarily bring offshore profits to the U.S. at as low a rate as 5.25 percent — an 85 percent reduction from the top corporate rate of 35 percent.

American corporations pay their full tax rate on profits made anywhere in the world, though they do get credits for taxes paid to foreign governments. According to some estimates, U.S. companies have more than $1 trillion abroad — money that corporations say they might repatriate more of if not for the high tax rate.

“There’s one simple and profound message here: We need the money in the United States. It’s doing no good overseas,” Stern, a former president of the Service Employees International Union, said Thursday.

In addition to Holtz-Eakin and Stern, Laura Tyson, a Clinton administration official, and the anti-tax activist Grover Norquist have backed the idea.

But the idea also has opponents from both sides of the political aisle, including the union-backed Citizens for Tax Justice and the conservative Heritage Foundation.

Critics have said a previous holiday, enacted in 2004, did not create jobs and that repatriated funds were instead used more for stock buybacks. The Joint Committee on Taxation has also projected that a second crack at a holiday could lose close to $80 billion over a decade.

“While Congress is working to address the projected long‐term deficits, a repatriation holiday is a narrowly targeted tax break that is neither warranted nor affordable,” a coalition of liberal groups wrote to lawmakers in October.

The White House has also said it is unwilling to look at repatriation outside of the broader discussion over tax reform. Meanwhile, Rep. Dave Camp (R-Mich.), the chairman of the House Ways and Means Committee, has released a draft proposal that would move to permanently limit U.S. taxation of offshore profits that includes a repatriation provision.

But on Thursday, both Holtz-Eakin and Stern said that, while they back tax reform, they were skeptical an overhaul could get done in an election year.

Holtz-Eakin also said that, even if funds were used for stock buybacks, that money would eventually seep into the economy. And, he added, repatriation would cost less than a one-year extension of the payroll tax cut.

In short, Stern said, repatriation could be “a little bit of a holiday present” for American workers.


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