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Another Democratic Sound Bite

August 10, 2012

This is my response to a post from one of my facebook friends, who states that the GOP killed a bill before the senate that would have brought jobs back to the US that were previously outsourced. After having read the actual bill and the relevant tax code here is what I found, and it is more smoke and mirror stuff to make the dems look good I think.

From Senate Bill 3364:
Senate Bill 3364: Section 2. Credit for insourcing expenses.
(a) In General- Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

It adds section 45 s. to the exiting tax code

Now go down to section (c), it reads as follows:
‘(c) Increased Domestic Employment Requirement- No credit shall be allowed under this section unless the number of full-time equivalent employees of the taxpayer for the taxable year for which the credit is claimed exceeds the number of full-time equivalent employees of the taxpayer for the last taxable year ending before the first taxable year in which such eligible insourcing expenses were paid or incurred. For purposes of this subsection, full-time equivalent employees has the meaning given such term under section 45R(d) (and the applicable rules of section 45R(e)). All employers treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer for purposes of this subsection.

It references section 45(d) of the existing tax code, which actually has to do with with businesses of 25 or less employees.
Also look above at section (c) Increased Domestic Employment Requirement, meaning they would have to add more employees then they had overseas.

For the 20% tax credit off of relocation expenses it does not seem to be worth having to relocate a business, hire all new employees at a much higher pay scale + benefits, and hire additional employees.
Maybe I mis-read something here, but I don’t see any real incentive for businesses. But it’s a good sound bite for the democrats.
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