–House Speaker Says He Supports Repatriation In Context of Tax Reform
–House GOP Bill Will Be ‘Fully Paid For’
–House GOP Plan Will Include Jobs Provisions
By John Shaw
WASHINGTON (MNI) – House Speaker John Boehner said Thursday that
the House Republicans will push a payroll tax cut extension bill next
week that includes several controversial environmental provisions but
does not include an equally controversial repatriation plan that some on
his leadership team actively support.
At a briefing after a House Republican policy meeting, Boehner said
he supports the concept of a tax repatriation holiday, but added “this
(the payroll tax cut extension) is not the right place to do it.”
The Speaker said a repatriation plan should be considered in the
context of tax reform.
Treasury Secretary Tim Geithner said earlier this year that
Congress should be working on broad corporate tax reform rather than
contemplating another one time tax holiday.
Geithner told the Senate Finance Committee that the Obama
administration would not support repatriation legislation “outside the
context” of comprehensive corporate tax reform.
Geithner said the “best thing” for Congress was to work on
“comprehensive corporate tax reform” which lowers corporate rates and
broadens the tax base.
At his Thursday briefing, Boehner said the House GOP payroll tax
cut extension bill will be “fully paid for” and will include “some of
our jobs initiatives.”
He said the bill will include a delay in a new pollution standard
for industrial boilers and the removal of impediments to construction on
the Keystone XL pipeline.
Extending the payroll tax cut for a year would cost about $120
billion. Extending unemployment benefits and preventing Medicare
reimbursement cuts for doctors would cost an additional $90 billion, so
the entire House GOP plan is likely to cost more than $200 billion.
The House GOP plan is likely to attract the active opposition of
Senate Democrats and the White House.
“We will stay here to Christmas even to New Year’s to get it (the
payroll tax cut extension) done,” Sen. Chuck Schumer, the third ranking
Senate Democrat, vowed Thursday.
The Senate will vote Friday on a Democratic payroll tax cut
extension.
To move forward in the Senate, the new Democratic bill will require
60 votes, a highly unlikely scenario.
Both parties are poised to spend much of the ten days–and perhaps
beyond–battling over the details of renewing the payroll tax cut and
other expiring tax provisions.
The Senate Democratic plan would cost about $180 billion and would
extend the payroll tax cut for a year. It would be paid for by a surtax
of 1.9% on individual income over $1 million that would be applied in
2013 and expire in a decade. The Senate Democratic plan also secures $38
billion by increasing fees on Fannie Mae and Freddie Mac.
Last year, the White House and Congress agreed on a tax cut package
that included reducing for one year the employee-paid share of the
Social Security tax from 6.2 percent to 4.2 percent.
President Obama and most Democrats in Congress have wanted to
further reduce the employee payroll tax to 3.1 percent and to cut the
employer share of the payroll tax from 6.2 percent to 3.1 percent for
the first $5 million of a company’s wage costs.
The new Senate Democratic plan drops the employer tax cut.
A Senate Republican plan to extend the payroll tax cut by a freeze
on federal salaries and hiring failed last week.
Republican senator Susan Collins and Democratic senator Claire
McCaskill are working on a compromise plan that would extend the current
payroll tax cut for individuals for another year and reduce the payroll
tax on employers to 4.2% for the first $10 million in a company’s
payroll.
The Collins-McCaskill package has an assortment of other tax and
infrastructure provisions. It would be paid for by imposing a 2% surtax
on income above $1 million, but would exempt small firms that pay taxes
through the individual income tax code.
** Market News International Washington Bureau: (202) 371-2121 **
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