A Brief History of Why We Still Have Tax Breaks for Companies That Ship Jobs Overseas

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There was a lot going on in the news last week, so no one would blame most Americans for missing a key vote in the U.S. Senate.

On July 30, 42 Senators, 41 of them Republican, filibustered a bill called the Bring Jobs Home Act, which would have ended tax breaks for companies that ship jobs overseas and eased the tax burden for companies who wanted to bring jobs back to the United States.

Let’s be clear about this. They filibustered the bill, meaning they didn’t even allow it to go to a full debate. They didn’t allow it to reach an “up or down vote,” where it would’ve only needed a simple majority of 50 votes to pass.

The filibuster started as a last ditch, emergency maneuver where a Senator could stand up and talk for hours upon hours to keep a vote from happening. The only way to stop the speech was a vote of 60 present Senators. But since 2008, Senate Republicans–under the direction of Minority Leader Mitch McConnell (R-KY)–have used the filibuster to block everything from economic stimulus to reauthorizing longstanding funding. Basically nothing can move without reaching that 60 vote threshold.

These filibusters and “cloture votes” have become so common in the last 6 years, barely anyone in Washington acknowledges how wildly ridiculous they are. The media, eager not to blame any party or individual in particular, still publish headlines like “bill fails 59-41″ without mentioning that there were 59 YES votes, and that a 41 vote minority oddly had the power to stop the bill in its tracks.

Last November, Democrats lead by Senate Majority Leader Harry Reid (D-NV) successfully ended the use of the filibuster only for certain votes; specifically, votes on presidential appointments like judges (but not Supreme Court judges) and key government officials. Sen. McConnell and his allies howled, as if this had come out of nowhere and they hadn’t abused the filibuster for 6 years. The media pushed this as a big event, leading many Americans to believe the filibuster had ended outright.

Oh no. It’s very much alive. And 2014 has seen its fair share: renewing unemployment insurance, raising the minimum wage, and much more.

So why fight so hard to preserve tax breaks for companies that ship jobs overseas? Steelworkers President Leo Gerard documents some of the reasons given:

Some Republican Senators stomped their feet and demanded continued subsidies for offshoring of jobs unless the entire tax code was overhauled, a feat that seems, well, somewhat unlikely from this record-breaking, do-nothing, Republican-thwarted Congress.

In other words: we don’t want to change the tax code until we change the whole tax code all at once. That’s not typically how things get done.

Other Republicans protested the cost. It’s true that over a decade, the change from tax breaks for offshorers to tax breaks for onshorers was projected by the Joint Committee on Taxation to cost $214 million. That’s million, not billion. And it’s over a decade, so $21.4 million a year.

Is that too high a price tag? Well…

That’s not chump change, but for comparison purposes, the state of Tennessee gave Volkswagen $165.8 millionthis year to expand its Chattanooga assembly plant. In 2008, Tennessee gave VW $577 million to build the factory in the state. That’s more than $742 million from one state to one company over six years, or, to put it another way, $123 million a year. That’s nearly six times the annual national cost of the Bring Jobs Home Act…there’s something deeply wrong with forcing Tennessee taxpayers to spend hundreds of millions to bring jobs to their state, and, at the same time, subsidize corporations moving jobs out of the state and the country.

Blocking the Bring Jobs Home Act and giving halfhearted excuses is bad enough. The other half of the injustice is how they blocked it, and how filibusters of much-needed legislation happen so often that it gets buried at the bottom of the weekly news.

Photo of Senator Mitch McConnell by Gage Skidmore

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