Bipartisan House group kickoff tax holiday push

The lawmakers’ proposal also includes a disincentive for companies to take advantage of the holiday and then shed workers: Each time a corporation that repatriated funds dropped its workforce below their previous average, it would have to add $25,000 to its taxable income.

Critics of the idea have said that – during a previous holiday enacted in 2004 –corporations poured their repatriated funds into buying back stocks instead of job creation. They also say that tax holidays encourage multinationals to keep profits overseas, to wait for the next repatriation opportunity.

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Rep. Lloyd Doggett (D-Texas), one of those critics, released an estimate from the Joint Committee on Taxation on Wednesday that said a general tax holiday would cost roughly $79 billion over a decade. 

But Brady and his allies asserted that common sense said their proposal wouldn’t be a drain on the Treasury. “This is money that’s never coming back otherwise,” Matheson told reporters on the conference call.

All that said, it remains to be seen how far the holiday makes it in this Congress. Rep. Eric Cantor (R-Va.), the House majority leader, quickly praised the new proposal on Thursday, while House Speaker John Boehner (R-Ohio) has also given the idea general praise. 

Rep. Dave Camp (R-Mich.), the chairman of the House Ways and Means Committee, has indicated in the past that he did not want to look at repatriation outside of the broader tax reform discussion. “Chairman Camp supports repatriation and his focus is comprehensive reform,” a committee spokeswoman said.

But while some current Senate Democrats have supported a holiday in the past, Sen. Max Baucus (D-Mont.), the chairman of the Senate Finance Committee, and others are skeptical of the last holiday’s benefits.

And the Obama administration has also said that it will only look at repatriation in the overall reform debate.