HR0044 96TH GENERAL ASSEMBLY

HR0044 LRB096 06336 JDS 16419 r

HOUSE RESOLUTION

WHEREAS, The United States Tax Code requires income earned in the United States by American firms to be taxed at the 35% corporate income tax rate, but allows foreign subsidiaries of these same firms to defer payment of corporate income tax on income earned in a foreign jurisdiction until that income is returned to the United States; and

WHEREAS, Neither the United States Tax Code nor Internal Revenue Service regulations require American firms to repatriate foreign income for the purpose of taxation; and

WHEREAS, This loophole has allowed American firms, such as General Electric, Pfizer, and Exxon-Mobil, to collectively park more than $500 billion in "undistributed earnings" offshore; and

WHEREAS, A recent study concludes that these foreign income deferrals caused the federal government to lose $17.4 billion in tax revenue in the year 2004 alone and simultaneously caused more economic growth in other countries and less here at home; and

WHEREAS, This loophole harms the State of Illinois by decreasing its tax base and encouraging corporate investment outside the United States; and

WHEREAS, During the 110th U.S. Congress, Senator Barack Obama (now, President Obama), Senator Hillary Clinton (now, Secretary of State Clinton), and Senator Richard Durbin took steps to alleviate this problem by sponsoring a bill in the U.S. Senate titled the Patriot Employers Act; and

WHEREAS, The Patriot Employers Act would have made a 1% tax credit available to firms that retain their headquarters in the United States and maintain or increase the number of their full-time workers in the United States relative to the number of their full-time workers outside of the United States; and

WHEREAS, The 110th Congress came to a close without passage of that bill, and a comparable bill has yet to be introduced in the 111th Congress; therefore, be it

RESOLVED, BY THE HOUSE OF REPRESENTATIVES OF THE NINETY-SIXTH GENERAL ASSEMBLY OF THE STATE OF ILLINOIS, that we urge the members of Congress to introduce and give full consideration to a bill comparable to the Patriot Employers Act in order to ensure that American firms contribute their fair share to our society's social welfare; and be it further

RESOLVED, That suitable copies of this resolution be presented to the Speaker and Minority Leader of the U.S. House of Representatives, the Majority and Minority Leaders of the U.S. Senate, and each member of the Illinois congressional delegation.