A Quick Stimulus That Would Create Jobs

Senator John Ensign offered an amendment today (January 30, 2008) in the Finance Committee that would result in a quick, strategic and long-term boost to the U.S. economy.  Ensign’s repatriation amendment would improve the economic stimulus package by encouraging American companies to return foreign earnings to the United States through a temporary tax break.

“All of the talk has been to provide a timely boost to the economy with a stimulus package that will quickly take effect,” said Ensign.  “But much of what we’ve seen would not provide much help immediately.  My amendment would do just that and has proven to do so in the past.”

Ensign’s amendment is similar to the provision he included in the 2004 JOBS bill.  As a result of this bipartisan provision, U.S. companies brought about $360 billion back into the United States to invest here.  This was more than twice the amount estimated by the Joint Committee on Taxation.  One study estimated that 82 percent of the repatriated earnings went to domestic capital investment, hiring and training employees, research and development, debt reduction and acquisitions. Ensign’s amendment does not allow the money to be used to increase the salaries of company executives.

“The amendment that I offered today would certainly stimulate the economy, and it would do it quickly through investment and job creation here at home,” said Ensign, a member of the Finance Committee.

The temporary tax rate reduction would be from 35% to 5.25%.  The 2004 provision was a revenue raiser for the federal government generating approximately $18 billion in new revenue for the U.S. Treasury.