WASHINGTON — When President Barack Obama talks to the nation about the economy Thursday, a Utah congressman will be listening for one of his own proposals to grow the private sector and encourage jobs.
Democratic Rep. Jim Matheson said a disincentive in the tax code prevents billions of dollars in private sector foreign earnings from returning to the U.S. to be plowed back into the domestic economy.
He and Rep. Kevin Brady, R-Texas, introduced legislation that would temporarily allow companies who return any foreign profits — above and beyond what they would ordinarily return — to be taxed at a fraction of the current 35 percent corporate tax rate.
"It should be part of (Obama's) plan," Matheson said. "It should be part of everybody's plan."
Matheson said he doesn't know Obama's position on the proposal. But "I'm confident that he and his economic team have at least heard of the idea."
In addition to pumping dollars into the economy, a one-year tax break would increase investment and hiring, provide research funds, reduce debt and shore up corporate balance sheets, he said, adding it would not cost taxpayers anything.
"We can do some good now for American employers and for the U.S. taxpayer, rather than do nothing by maintaining the status quo," he said.
American companies of all types and particularly those in the technology sector operating overseas leave their growth and new jobs there. "We want that money to come back here," he said.
The United States, Matheson said, is one of five countries that taxes profits made offshore.
"It's really a form of double taxation. Once over there and once here," he said.
Similar legislation was enacted in 2004, which Matheson said resulted in billions of dollars of reinvestment into American companies and significant revenue to the U.S. Treasury.