"Cantor’s ‘Priorities’: Paying Companies To Invest Overseas While Laying Off Teachers At Home"
Back in May, when Democrats proposed one of the various iterations of the state aid bill that finally passed the House yesterday, House Minority Whip Eric Cantor (R-VA) blasted them for not “assessing priorities.” Last night, Cantor went on Fox News and laid out exactly what those priorities are.
The bill in question provides $26 billion in aid to states — $16 billion for Medicaid and $10 billion to prevent teacher layoffs — and actually reduces the deficit by $1.3 billion over ten years. But Cantor, right after asking “why aren’t we doing something about the deficit,” said passage of the bill “just begs the question about the priorities here”:
VAN SUSTEREN: $26 billion. The President says it’s deficit neutral, it’s going to pay for itself. True or false?
CANTOR: First of all, it doesn’t pay for itself. There are alleged pay-fors in the bill. And the way they come up with the biggest is they go for trying to impose a tax on job creators. You’ll hear many of the proponents of the bill talk about the need for us to stop shipping jobs overseas. But what this tax that they’re imposing does is it imposes additional cost on to foreign-based companies that have American facilities. That means jobs in America suffer. [...]
VAN SUSTEREN: In terms of paperwork, are you telling me that a company like, let’s say, BMW or Mercedes, if they have a plant here in the United States, that in order to pay for the $26 billion they’re going to have to pay an additional tax?
CANTOR: Right. This is why the National Association of Manufacturers, the Chamber of Commerce, people who represent small and large businesses say, wait a minute, this is bad. These taxes are not something we should be doing right now if you want us to create jobs. And again it guess back to the point, we are still at 10 percent unemployment. So, you know, again, it just begs the question about the priorities here.
Those “alleged pay-fors” at which Cantor scoffs are, according to the Congressional Budget Office, actually pay-fors, which reduce the deficit in the out-years. The cost of the bill is covered through an unfortunate cut in Food Stamps and the closing of a corporate tax loophole that allows multinational corporations to claim tax credits on earnings that they keep overseas.
It’s this closing of a loophole that Cantor disingenously refers to as a “tax on job creators.” But as House Ways and Means Committee Chairman Sander Levin (D-MI) pointed out, this aspect of the byzantine corporate tax code was actually “tilting the playing field in favor of investment overseas,” as the U.S. taxpayer actively subsidized companies for investing in other countries.
So Cantor is making it perfectly clear what his priorities are: continuing to pay multinationals to invest in other countries while allowing the education system at home to wither on the vine.