“The Foreign Earnings Reinvestment Act… would temporarily allow companies to return profits earned overseas to the United States at a reduced tax rate and generate the flow of an estimated $1.9 trillion dollars back into the American economy,” the press release issued on Thursday said.
The bill, introduced in both chambers of US Congress on Thursday, will allow temporary reduction from the current 35 percent corporate rate to an 8.75 percent on foreign earnings brought back to the United States, according to the release.
“Our common-sense legislation would create strong incentives for those companies to invest these earnings in US employees. It would also ensure that innovative businesses… stay in the United States and continue to invest in local economies,” McCain was quoted as saying in the press release.
In addition, the bill would discourage US companies from staff reduction by adding a $75,000 fine per eliminated full-time position to a company’s gross income calculation, the press release said.
On Wednesday, the Internal Revenue System issued a statement that US taxpayers are using a number of schemes to reduce their taxable income for the 2015 filing season, including abusive tax shelters, filing fake documents to hide income, and falsifying income to claim tax credits.