The House did it again yesterday—used an anti-competitiveness tax hike on some businesses in the United States to “pay for” an unrelated, albeit worthy, policy initiative.
The James Zadroga 9/11 Health and Compensation Act of 2010 (H.R. 847) — approved by a vote of 268 to 160—would extend and improve protections and services to individuals whose health was directly affected by the September 2001 attacks in New York.
That’s the good idea. The bad news is that the bill would impose some $7 billion in taxes on foreign-owned companies doing business in the United States by repealing some long-standing treaty benefits. The limit on treaty benefits will violate many of the bilateral tax treaties currently in effect between the United States and foreign countries and could lead to retaliatory actions by other countries or withdrawal by our treaty partners from existing treaties. Tax increases like these would make the United States less attractive for foreign companies to invest and create jobs and that’s a big concern for the 20 percent of manufacturing workers in the United States who work for foreign-owned companies.