Nov 09 2011
Today, I introduced the Rebuilding America Act, a bill that will finally eliminate the barriers between the American economy and the profits American companies make overseas. Already, five of my Senate colleagues, Senators Roy Blunt (R-MO), Mike Crapo (R-ID), Jim DeMint (R-SC), Rand Paul (R-KY), and Jim Risch (R-ID), are co-sponsoring the bill.
Right now, American companies are holding over $1.4 trillion in foreign profits outside of our borders because the U.S. has the single highest tax on repatriated profits in the developed world. Moody’s estimates that by 2013, U.S. tech companies could hold as much as 79% of their cash abroad. American businesses want to bring their earnings back here, build out their infrastructure, and invest in their domestic workforce, but current law, which taxes profits brought back into the country at 35%, makes such investment prohibitively expensive.
Recent repatriation “holidays,” which lasted only a short period of time, failed to give business owners the certainty they need to make long-term investments, such as expanding their labor force. My bill would permanently set the repatriation tax rate at 5%, giving American companies confidence in a stable revenue stream that they will be able to count on to fund long-term expansion.
Most importantly, the Rebuilding America Act will free up this enormous new source of capital without costing taxpayers one cent. In fact, even a former Clinton economist, Laura Tyson, estimates that freeing the $1.4 trillion being held abroad will result in an increase in corporate tax revenues of $36 billion. Rather than borrowing additional billions from China, as President Obama would have us do, my plan will provide those billions to American companies while making money for the United States Treasury.
In today’s world, our repatriation tax is a backwards relic of the 20th century that makes our businesses uncompetitive in the global marketplace and acts as a wall between our domestic economy and money earned abroad. It’s time to tear down that wall for good.