[Congressional Record Volume 153, Number 43 (Tuesday, March 13, 2007)]
[Extensions of Remarks]
[Page E530]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


[[Page E530]]
                         ACTIVE FINANCING BILL

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                             HON. DAVE CAMP

                              of michigan

                    in the house of representatives

                        Tuesday, March 13, 2007

  Mr. CAMP of Michigan. Madam Speaker, I am pleased to join 
Representative Richard Neal and introduce legislation to make permanent 
the Subpart F exception for active financial services income. Under 
current law, the provision will expire next year.
  I have long been an advocate for this legislation. While Congress has 
extended Subpart F for active financial services income on an ad hoc 
basis, such inconsistency does not make for good tax planning or tax 
policy. Besides ensuring consistency, Congress must develop policies 
that help businesses invest and keep jobs here in the United States. 
Allowing tax benefits to expire is a direct tax hike on employers, and 
it is a direct assault on every American job.
  This legislation ensures that U.S. financial services firms can 
continue to defer U.S. tax on their earnings from their foreign active 
financial services operations until such earnings are paid as dividends 
back home. No other developed country in the world imposes current tax 
on financial services income earned outside their country. If the U.S. 
is to remain competitive in the global marketplace, the Federal 
Government must not put our companies at a tax disadvantage. Without 
the legislation we are proposing, American financial services companies 
will lose out on business to foreign firms. When American companies 
lose customers, American jobs are lost.
  Overseas operations are important to American companies' domestic 
success. For example, if North American profits dip, these companies 
can use their global profits to offset losses. And, as I mentioned 
before, domestic jobs are gained when a business has more customers to 
sell to. Domestic jobs support overseas operations, increased product 
exports, and product development.
  Failure to make permanent this current law provision would be a 
critical mistake for the U.S. economy. If U.S. financial services 
companies have to pay current U.S. tax on the active financial services 
income they generate overseas, they will have higher costs than their 
foreign-owned competitors. Their customers will turn to non-U.S.-owned 
firms. Given the thousands of U.S. jobs at stake, I do not believe our 
tax policy should allow this to happen.
  I urge my colleagues to support this important bill.

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