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Why business is so worried about $10B in the jobs bill

The House just passed a $26 billion package helping state governments, and they're paying for it in part with a $10 billion tax hike on multinationals.

Paid over 10 years, that's not very much from the pockets of companies such as General Electric, American Express, Hewlett-Packard and Bank of America. And it's even smaller compared to past budget proposals from the president in which the White House proposed raising as much as $210 billion from multinationals.

That plan was to nix provisions that let businesses defer tax payments on overseas income until they bring that money back to the United States. The bill passed by the House Tuesday raises money by making it harder for companies to claim tax credits on some of their overseas income.

But the issue isn't the dollar amount. It's that up until now, talk of raising taxes on multinationals has remained just talk -- granted, very contentious talk between the White House and tech executives whose companies have operations around the world. The jobs bill is the first time during this debate that some of these tax hikes are becoming law.

The Business Roundtable is of course worried this is just the beginning. "Anytime Congress puts a tax increase on the table as a pay-for for other spending, you can be certain that it's going to be raised again and again and again," said Johanna Schneider, executive director of external relations for the BRT.

Democrats have more ideas -- raising much more than $10 billion -- on how to get money by tweaking this portion of the tax code. This fall, tech and pharma companies will be reading the fine print of every spending bill very carefully.

By Jia Lynn Yang  |  August 10, 2010; 4:10 AM ET
Categories:  Corporate taxes , Job creation  
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Comments

Don't they think this will hurt the unemployment numbers?

Posted by: staticvars | August 13, 2010 2:25 PM | Report abuse

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