New Durbin Bill Seeks To Keep Corporations From Exporting Jobs

With the increasing frequency of corporate inversions in recent years and the breakneck pace at which even domestic corporations are shipping jobs overseas, it isn’t surprising that the U.S. government wants to find a way to incentivize big companies to keep their jobs here. With the election coming up, there seems to be little chance of any serious legislation passing through this year, but that hasn’t stopped some politicians from trying.

On June 23, Sen. Dick Durbin announced that he would be introducing the “Patriot Employer Tax Credit Act,” which would give tax credits to companies that provide fair wages and real benefits, according to The Chicago Tribune. The bill would also close a loophole that gives corporations a tax break for activities like building a factory overseas.

Under the terms of Durbin’s new act, employers that qualified would get a credit worth 10 percent of the first $15,000 of wages earned by each employee, according to Greg Hinz of Crain’s Chicago Business. In order to qualify, they would have to remain located in the United States for tax purposes, retain or increase the proportion of U.S. workers to foreign workers year to year and provide ACA compliant health insurance benefits. Companies would also have to pay at least 90 percent of their workers an hourly rate equal to 150 percent of poverty-level wages and offer 90 percent of non-executive workers a defined-benefit retirement plan, among a few other requirements.

“If Sen. Durbin were truly interested in creating good-paying jobs, like those in manufacturing, he should sponsor legislation cutting the corporate tax rate for American companies,” Illinois Manufacturers’ Association vice president Mark Denzler said in a statement, according to the news source. “It’s time for real solutions, not more political games in an election year.”

In response to criticisms, Durbin’s team quoted remarks by Michael Graham, CFO for JMC Steel Group, Hinz reported. “We’re glad that this bill is being proposed,” said Graham. “It’s going to help companies like JMC keep jobs in America and it’s going to help us invest in capital expenditures.”

Several states have cut taxes to keep jobs from being exported to other countries, find out more about these cuts Several States Cut Taxes July 1.

If you have any questions about this post or would like to discuss your company’s tax,trust, and estate matters , please contact me, James F. McDonough at ScarinciHollenbeck.com.