By a vote of 24 to 15, the House Ways and Means Committee moved a bill forward Tuesday that supporters hope will generate new jobs for American workers in the form of a $128 billion corporate tax cut.
"The American Jobs Creation Act does just that—creates jobs for American workers," said Bill Thomas (R-CA), Chairman of the Committee on Ways and Means and sponsor of the bill, in a release issued by the Committee. "We will protect and expand jobs for hard-working Americans."
H.R. 2896, the American Jobs Creation Act of 2003, has not been without controversy with detractors worried that it could hurt American manufacturers and despite supporter claims to the contrary, it isn’t certain to help the economy.
The Associated Press reported that, "Balancing the items that raise revenue with new tax cuts, the bill would cost $60 billion over the coming decade."
According to the Committee release, the bill:
- Reduces the tax rate for U.S. producers and manufacturers from 35 to 32 percent;
- Includes an across-the-board rate cut for all C-corporations with less than $20 million in taxable income;
- Expands the size of companies exempt from the unfair corporate Alternative Minimum Tax (AMT) from $7.5 million of gross receipts all the way up to $20 million; and
- Repeals the Foreign Sales Corporation-Extraterritorial Income (FSC-ETI) tax regime to head off $4 billion in tariffs against U.S. goods.
The tariff arose earlier this year when the World Trade Organization ruled that "a $5 billion annual tax break for U.S. exporters amounts to an illegal subsidy," the Journal reported, adding that the U.S. faces $4 billion in penalties if the tax break isn’t repealed. This new law aims to replace the old system.