This week, the House of Representatives is working on a package extending several popular tax breaks as well as important social safety net provisions like unemployment benefits and health insurance subsidies for laid-off workers. The bill costs about $200 billion, but is partially offset by a few tax changes, including the closing of a loophole that allow corporations to claim U.S. tax credits on profits earned overseas. These unjustified tax breaks have been on the radar of Congress’ tax writers for the last few years, but so far they’ve remained in the tax code due to pressure from big corporations. This time, even though the bill also extends some of their favored provisions, like the Research and Development tax credit, the Big Business lobby is fighting to preserve its ability to exploit tax loopholes, at the expense of the benefits extension:
International Business Machines Corp. and trade groups for major U.S. companies are pressing Congress to defeat a jobs bill containing billions of dollars in taxes on their global operations…In a letter to lawmakers yesterday, Armonk, New York-based IBM, the world’s biggest computer-services provider, told lawmakers it “strongly opposes” the legislation and would rather do without the research credit than face new taxes on overseas profits.
The Chamber of Commerce has, of course, weighed in on behalf of the corporations, claiming that the legislation is a “job killer.” Closing the loopholes in question would raise about $14.5 billion over ten years, or about $1.5 billion per year from the entire multinational corporation community. According to the National Employment Law Project, 1.2 million Americans who are currently eligible for extended benefits will lose them in June if Congress doesn’t act. The Wonk Room has more.