This vote was on preserving an amendment by Barbara Boxer, D-Calif., that would reduce the tax rate corporations pay when they send their earnings from overseas back to the United States. The amendment was offered to a massive economic stimulus bill intended to spur job creation and economic growth. When Boxer offered her amendment, Max Baucus, D-Mont., sought to defeat it with a parliamentary maneuver because it violated the Senate’s rules against increasing deficit spending. Boxer then made a motion that the rule be waived in this case, which is what this vote was on.
Boxer said her amendment, which she cosponsored with John Ensign, R-Nev., would provide an incentive for companies to bring money they earn overseas back into the United States, which would be required to be invested in the economic recovery.
“Right now there is about $800 billion sitting offshore because companies do not want to bring it in because it would be taxed at a 35-percent rate. This means, first and foremost, if you think about it, that our banks do not have any of these funds at a time when they are desperate for capital. This means that at a time that we want to inject dollars into this economy, those dollars are sitting offshore,” Boxer said. She said that in the past when similar legislation has been enacted, companies did indeed bring that money back into the United States, where it benefitted the country’s economy.
Boxer’s amendment would reduce the corporate tax rate, but require that companies taking advantage of that rate would have to be audited and must use those funds to create or retain jobs, make capital improvements, acquire other failing businesses or invest in clean technology.
Max Baucus, D-Mont., said the amendment isn’t a good idea because it’s unfair to American companies that don’t do business overseas.
“So on the first level, this is totally unfair. Here we are, an American company doing business in America. We have to pay the full 35-percent corporate tax rate compared with companies that have significant revenues overseas. They bring it back to the United States, and they only pay 5 percent. These are companies that are taking advantage of the current tax laws by bringing it home, especially bringing back home repatriated income,” Baucus said. He also suggested that it would encourage continued bad conduct.
The motion was rejected by a vote of 42-55. Of Republicans present, 33 voted for the motion and 7 voted against it. Of Democrats present, 8 voted for the motion and 47 voted against it (including a majority of the most progressive members). The end result is that the motion to waive the rules failed, the Boxer-Ensign amendment was killed with a procedural maneuver, and the bill went forward without language that would have decreased the tax rate corporations pay when returning their overseas earnings back to the United States.