On July 30, the Republican party in the United States Senate, by a 54-42 procedural
vote that divided on partisan lines and required at least 60 votes to move the
bill to a definitive vote, succeeded in defeating the Bring Jobs Home Act, which
would have provided a 20 percent tax credit against companies' expenses incurred
when bringing jobs back to the country.
Re-introduced by Democrat lawmakers with the stated objective of placing pressure
on American companies moving operations abroad to avoid the high US corporate
tax rate, the bill would have provided the tax credit against "eligible
insourcing expenses" associated with relocation to the US on the condition
that the company increase its workforce of full-time US employees.
Allowable expenses would have included costs incurred by the taxpayer in connection
with the elimination of any of its business units (or of any of its affiliates)
located outside the US, as well as those incurred by the taxpayer in connection
with the establishment of a new business unit to be located in the US.
On the other hand, the bill would have also denied businesses any tax deduction
for moving expenses if those costs are associated with an elimination of a business
unit in the US and the establishment of a new business unit abroad. In addition,
a company would have not been able to charge to the capital account or amortize
those outsourcing expenses that are deemed to be non-deductible.
The Bring Jobs Home Act was introduced by John Walsh (D – Montana), but
it was also pointed out that the bill had remained unchanged since it was introduced
two years ago by its current co-sponsor, Debbie Stabenow (D – Michigan),
when it was also blocked by the Republican Party.
While the Senate Majority Leader Harry Reid (D – Nevada) stated that
"this bill would have ended the ridiculous practice of American taxpayers
picking up the tab for companies moving abroad and sending American jobs overseas,"
and that "Senate Republicans have voted yet again to keep American workers
from having a fair shot at a good, secure job," Republicans leaders continued
to call the bill an election-year gimmick. When the bill was introduced in 2012,
it was also at a time just before an important election, they said.
In fact, the Ranking Member of the Senate Finance Committee Orrin Hatch (R
– Utah) had expressed the hope that Democrats "will allow a full
and fair debate on [the bill], including an open amendment process that will
allow the Senate to explore alternative approaches and to discuss different
ideas on how best to create jobs in this country."
However, when Reid stopped Republicans from offering any amendments to the
bill, a wide bipartisan margin of 93-7 in the previous Senate vote to push it
forward on July 23, became a partisan vote against advancing the bill only a
In any case, Hatch had already pointed out that that "under present law,
there are no targeted tax credits or disallowances of deductions related to
relocating business units inside or outside the US," and that the Joint
Committee on Taxation has estimated that preventing businesses from deducting
expenses relating to outsourcing abroad would raise just USD143m over ten years,
while the 20 percent tax credit for companies relocating to the US would cost
USD357m over the same period.