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Proposed bill would bring foreign earnings back to U.S.

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Sen. Kay Hagan (D-NC) Thursday introduced a bill she and Sen. John McCain (R-AZ) are co-sponsoring to repatriate foreign tax dollars into the U.S. economy.

The Foreign Earnings Reinvestment Act would offer corporations to pay less in taxes if they wanted to bring their overseas earnings back to the U.S.

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Hagan insisted that the increased earnings, which she said amounted to around $1 trillion “stranded” overseas, would allow companies to hire more workers at home and make a dent in the unemployment rate.

“The status quo is unacceptable,” Hagan said on a conference call with reporters. “This is clear to everyone outside Washington.”

The top corporate rate for repatriation is currently 35 percent. If the bill is passed, the funds could be repatriated at a tax rate of 8.75 percent.

If companies show that they have expanded their workforce by 10 percent in 2012, they could qualify for an even lower repatriation tax of 5.25 percent.

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“It’s not the only solution to our economic crisis, but that’s no reason for inaction,” Hagan said. “We need practical, bipartisan action to get our economy growing, and growing now.”

A similar tax holiday at the 5.25 percent rate was implemented in 2004 and was not seen as having much impact. Asked why the new tax holiday bill would perform any differently, Hagan cited the dire need for economic growth the U.S. now faces as an incentive for companies to make the most of the bill.

“The 2004 bill came during the 2004 economy,” she said. “It was a different time and a different place than we are now.”

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There are also penalties in the bill for companies that take advantage of the low rate but lay workers off.

“Companies are definitely looking at what they could do with that money if they brought it back,” she said.

In a prepared statement this morning, McCain also praised the bill’s potential, calling it “common sense legislation.”

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“While Americans struggle with crushing unemployment and a dismal economy, Congress has the responsibility to come together with solutions to get our nation back on track,” McCain said. “I am proud to join Senator Hagan in introducing the Foreign Earnings Reinvestment Act. Let’s use American dollars to make America’s economy stronger.”

Creative Commons image via flickr user Third Way.

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… then let us make a small request. Like you, we here at Raw Story believe in the power of progressive journalism — and we’re investing in investigative reporting as other publications give it the ax. Raw Story readers power David Cay Johnston’s DCReport, which we've expanded to keep watch in Washington. We’ve exposed billionaire tax evasion and uncovered White House efforts to poison our water. We’ve revealed financial scams that prey on veterans, and efforts to harm workers exploited by abusive bosses. We’ve launched a weekly podcast, “We’ve Got Issues,” focused on issues, not tweets. Unlike other news sites, we’ve decided to make our original content free. But we need your support to do what we do.

Raw Story is independent. You won’t find mainstream media bias here. We’re not part of a conglomerate, or a project of venture capital bros. From unflinching coverage of racism, to revealing efforts to erode our rights, Raw Story will continue to expose hypocrisy and harm. Unhinged from corporate overlords, we fight to ensure no one is forgotten.

We need your support to keep producing quality journalism and deepen our investigative reporting. Every reader contribution, whatever the amount, makes a tremendous difference. Invest with us in the future. Make a one-time contribution to Raw Story Investigates, or click here to become a subscriber. Thank you.



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Wall Street Journal drops a truth-bomb on Trump over his market-destroying trade war: ‘Everyone loses’

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In yet another blast from the editorial board of the Wall Street Journal, the editors looked back at Friday's stock market free fall and pointed the finger directly at President Donald Trump and his "trade-war general" Peter Navarro for being the main culprits.

After Friday's disastrous stock market session that took a major downturn due to the escalation of the trade war -- with China and Trump ordering billions of dollars in new tariffs -- the Journal pointed out that there will be no winners.

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G7 off to a rough start as Trump aides slam host Macron’s agenda

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With President Donald Trump at the latest G7 summit, all eyes are on the interactions between him and French President Emmanuel Macron. The two world leaders started off amicably, exchanging pleasantries, but behind the scenes, things have grown contentious.

According to Politico, Trump officials are railing against Macron, accusing him of trying to "fracture" the summit by steering the negotiations away from trade and into areas like climate change.

This development comes after Trump harshly criticized Macron for enacting a tax on digital services, which could increase costs for American tech companies like Google and Facebook. Trump threatened that if France does not suspend its "unfair" digital tax, "we'll be taxing their wine like they've never seen before." It is a threat that Trump has made repeatedly over the last few weeks whenever he has gotten angry at France.

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A likely recession could doom Trump

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President Donald Trump is worried that there will be a recession before the 2020 election. For once, he is right about something.

This article first appeared in Salon.

"The Economy is strong and good, whereas the rest of the world is not doing so well. Despite this the Fake News Media, together with their Partner, the Democrat Party, are working overtime to convince people that we are in, or will soon be going into, a Recession," Trump tweeted on Friday in a clear attempt to assuage concerns. "They are willing to lose their wealth, or a big part of it, just for the possibility of winning the Election. But it won’t work because I always find a way to win, especially for the people!"

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