House lawmakers started debate on the Investing in American Jobs and Closing Tax Loopholes Bill of 2010 (HR 5893) on July 29, but postponed a final vote of the measure that was introduced by Ways and Means Committee Chairman Sander M. Levin, D-Mich. A spokesman for the committee said the bill would reach a vote on July 30.
GOP lawmakers disputed Democrats’ claims that the legislation would create jobs since it raises nearly $12 billion in taxes on manufacturing companies that do business overseas. “At a time when other countries are taking steps to attract business, this legislation sends exactly the opposite message, with the effect of discouraging business investment and job creation in the U.S.,” said ranking committee member Dave Camp, R-Mich.
Democrats countered that the expansion of the Build America Bond program, as well as the New Market Tax Credit program, would keep the economy producing jobs. The legislation would prevent companies from receiving tax breaks for sending jobs overseas, Democrats said. The legislation includes a package of provisions aimed at curtailing abuses of the U.S. foreign tax credit system, such as rules to prevent splitting foreign tax credits from income and limits on the use of Code Sec. 956 for foreign tax credit planning.
House lawmakers spent much of the day debating the Transportation, Housing and Urban Development, and Related Agencies Appropriations Bill, 2011 (HR 5850). The day-long debate crowded out work on other bills that were scheduled for passage. Lawmakers failed to suspend the rules and approve the James Zadroga 9/11 Health and Compensation Bill (HR 847), a measure to provide health care for first responders and survivors suffering from toxins released during destruction of the World Trade Center towers. The measure required a two-thirds vote for passage, but the vote was 255-to-159. The bill’s revenue offsets included a provision to change corporate estimated tax payments and a provision to stop companies from channeling income to countries without tax treaties in order to avoid paying U.S. taxes. Rep. Joe Crowley, D-N.Y., said lawmakers faced a simple choice: “vote to protect foreign corporations who are avoiding U.S. taxes; or vote to protect those who stood in protection of us on September 11th.”
Lawmakers were expected to debate and vote on the Airline Safety and Federal Aviation Administration (FAA) Extension Bill of 2010 (HR 5900), which would extend FAA aviation programs, taxes and expenditure authority until September 30, pending completion of a multi-year FAA reauthorization bill. House Transportation and Infrastructure Committee Chairman James L. Oberstar, D-Minn., introduced HR 5900 on July 28. The measure will likely be passed by the House on July 30.
Real Estate Jobs and Investment
House lawmakers also postponed a vote on the Real Estate Jobs and Investment Bill (HR 5901), sponsored by Crowley. The bill would exempt certain stock of real estate investment trusts (REITs) from the tax on foreign investment in U.S. real property. Under current law, foreign investors can own up to a 5-percent stake in a REIT before they are subject to a higher tax rate. The measure would allow a 10-percent stake before the higher tax kicks in. The cost of HR 5901 would be offset by allowing continuous levies of tax liabilities on federal contractors.