[Congressional Record Volume 143, Number 22 (Wednesday, February 26, 1997)]
[Extensions of Remarks]
[Page E316]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   FOREIGN SUBSIDIARY TAX EQUITY ACT

                                 ______
                                 

                      HON. JAMES A. TRAFICANT, JR.

                                of ohio

                    in the house of representatives

                      Wednesday, February 26, 1997

  Mr. TRAFICANT. Mr. Speaker, today, I introduced the Foreign 
Subsidiary Tax Equity Act, a bill to discourage domestic corporations 
from establishing foreign manufacturing subsidiaries in order to avoid 
Federal taxes. I urge all Members to cosponsor this important 
legislation.
  The bill is long overdue. American manufacturers have abused the good 
faith of the American workers by developing manufacturing processes in 
this country then moving production facilities overseas while handing 
out pink slips to workers here in America. Despite the fact that the 
American worker is the most productive and talented laborer in the 
world, many U.S. manufacturers, lured by cheap labor costs and tax 
holidays, have closed down plants and moved operations to countries 
like Mexico, Taiwan, and South Korea. Using the complex Tax Code to 
their advantage, some U.S. corporations pay next to nothing in Federal 
taxes. How can we as a Congress justify these policies?
  Under my bill, foreign subsidiaries of U.S. companies located in 
countries that provide tax holidays and other tax breaks and ship a 
significant portion of their products into the United States, would be 
taxed as if that subsidiary were located in the United States. My bill 
is designed to discourage tax-motivated foreign investment while 
protecting the jobs of your constituents.
  I have always argued that many of America's social problems--crime, 
welfare abuse, health care costs, unemployment, and a breakdown in 
family values--lie in our trade and taxation policies. If we forced 
rogue multinationals to pay their fair share to the U.S. Treasury, we 
would be able to better tackle these problems.
  I urge all Members to cosponsor this bill.

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