At a time when our country’s economy needs a shot in the arm and our federal government can no longer afford stimulus funds, American businesses stand ready to step up and inject $1 trillion trapped overseas by punitive federal tax law.
Duke Energy alone has $1.2 billion held hostage overseas by a tax system that penalizes U.S. businesses that want to bring their foreign earnings to America to create jobs.
With the right changes to our tax laws, we can bring that money home to support and accelerate our capital program investments in smart-grid technology, retire and replace older coal plants, and build natural-gas and renewable generation.
America has the second-highest corporate tax rate in the world. Our tax system has a strong disincentive to U.S. businesses that want to bring their foreign earnings to America by incrementally taxing these profits — after those businesses have already paid their fair share of taxes to the country in which the earnings were generated.
We need Congressional action now to unlock this cash so it can be put to work here at home to spur our economic recovery.
The current system, and the folly it encourages, leaves U.S. global businesses with three bad choices: bring the money home and endure exorbitant taxes; leave it in foreign banks; or continue to reinvest offshore profits offshore.
A bipartisan group in Congress recently introduced the Freedom to Invest Act, which is gaining support from economists and organizations from across the political spectrum.
Studies show that had we included temporary investment incentives in the 2009 stimulus, it would have injected $565 billion into our economy in repatriated earnings, created an additional 2.6 million jobs — including nearly 2.1 million manufacturing jobs — and reduced the budget deficit by an average of nearly $46 billion a year for five years.
This was an opportunity missed, and these figures underscore how much we stand to gain by making a different choice today.
History strongly supports this approach. Congress enacted a similar measure in 2004, and it had an overwhelmingly positive effect: It reinvested more than $300 billion into the American economy, created jobs, financed new plants and research-and-development projects, increased federal revenues, increased gross domestic product and lowered the unemployment rate.
Our economic recovery has floundered in recent months, and we must act now to change our broken tax laws that are preventing one of our greatest resources — American enterprise and profits — from providing the stimulus our economy so badly needs.
Vice President Joe Biden waits to conduct a mock swearing-in ceremony with Sen. Brian Schatz, D-Hawaii, in the Capitol's Old Senate Chamber, December 2, 2014. Schatz was sworn in to serve the remainder of his term since he was appointed to the seat after Sen. Daniel Inouye, D-Hawaii, passed away.