[Congressional Record Volume 142, Number 75 (Friday, May 24, 1996)]
[Extensions of Remarks]
[Page E927]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   SMALL BUSINESS JOB PROTECTION ACT

                                 ______


                         HON. RICHARD J. DURBIN

                              of illinois

                    in the house of representatives

                         Thursday, May 23, 1996

  Mr. DURBIN. Mr. Speaker, I voted in favor of the Small Business Job 
Protection Act yesterday because it provides several advantageous new 
tax benefits for small businesses and their employees. By creating 
simplified retirement plants, extending the tax exclusion for employer-
provided educational assistance and encouraging employers to hire 
workers from economically and otherwise disadvantaged groups through 
the Work Opportunity Tax Credit, this legislation can contribute to the 
vitality of small businesses.
  Despite the positive attributes of this bill, two provisions trouble 
me. First, by repealing section 956A of the Tax Code, Congress is 
reinstating an incentive for U.S. companies to move operations and jobs 
to foreign tax havens, accumulate unlimited passive assets, and avoid 
paying U.S. income taxes.
  Congress put section 956A in the Code in 1993 to curb the ability of 
controlled foreign corporations to accumulate excess passive assets and 
shelter them from U.S. taxation. By repealing this provision, we are 
giving yet another tax break to multinational corporate giants and a 
paid-for-ticket to run to tax havens. And oddly enough, we're doing it 
in a ``small business'' bill.
  Secondly, I do not favor the wholesale repeal of the Section 936 tax 
credit which encourages economic investments in Puerto Rico. This 
action would have a detrimental impact on American citizens in Puerto 
Rico. I do endorse reform of the credit, focused on establishing 
effective mechanisms to foster and improve job creation, and using the 
projected revenue savings for social and employment and training needs 
in Puerto Rico.
  I urge House conferees to carefully reassess these provisions and 
seek alternative revenue sources to pay for the valuable small business 
tax reforms in this legislation.

                          ____________________