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JOBS International Tax Bill Bogged Down In Senate By Election Year Politics

by Mike Godfrey, Tax-News.com, Washington

26 March 2004

The international tax bill that seeks to put an end to European Union tariffs on US exports is currently stalled in the Senate over an unrelated issue concerning overtime regulations.

The issue surrounds an amendment to the bill, proposed by Sen. Tom Harkin (D-Iowa), that will block pending Labor Department overtime regulations. The Democrats are arguing that these regulations will prevent millions of workers from being eligible for overtime, and the issue has now become embroiled in the wider election debate on job creation.

Harkin argues that Democrat proposals preserving overtime will create an incentive for employers to hire new workers, whilst ensuring that those in poorly-paid jobs in the service industry are not exploited. "Creating jobs or losing jobs, that's what this amendment is all about," claimed Harkin.

However, Republicans have hit back, arguing that failure to pass the bill, which provides for a 3% corporate tax cut for US manufacturers, replacing FSC-ETI legislation, will hurt job creation more as US firms feel the pinch from EU tariffs. "We can create jobs, or we can destroy jobs, by letting the 17% tariff kick in," observed Kentucky Sen. Mitch McConnell.

Meanwhile, in a speech to the Senate Floor on Wednesday, Senate Finance Committee Chairman Charles Grassley, the driving force behind the ‘JOBS’ bill (Jumpstart Our Business Strength), observed that “Politics have ruled the day.”

“I wanted to act on this bill last year because I was fearful that election year politics would get in the way of the Senate's ability to do its job. It looks like I might have been right after all,” lamented Grassley.

“Senator Baucus and I had an agreed order of amendments that would have improved the bill and brought important relevant issues. That agreement was undermined by the Democratic leadership. They would prefer to turn this bipartisan bill into a political football,” he commented.

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