The US Senate threw its support behind a tax cut for American manufacturers, urging the House to follow its lead and head off punishing tariffs that creep up every month.
The tariffs, imposed by the EU, retaliate against the US for failing to end a domestic tax break deemed an illegal export subsidy. Senators said they hoped their 92-5 vote on Tuesday gives the bill a jolt that will help it move through the House.
The Senate bill goes beyond a simple fix to end the trade dispute. During months of debate, senators added parts that block the US administration from rewriting overtime pay regulations to strip the benefit from workers and prohibit federal contractors from using tax dollars to contract work overseas.
Lawmakers also folded in US$14 billion in energy production incentives, a pile of expiring tax credits and a short-term tax break meant to encourage companies to bring home income accumulating abroad.
At its core, the Senate bill would cut taxes for American manufacturers, rewarding most to those companies that produce their goods at home. The entire package cuts taxes US$170 billion over a decade, including some new and old tax cuts.
Lawmakers cover the cost of the package with money recouped from the repealed tax break for exporters and an assault on corporate tax shelters and loopholes.
"Since we're giving tax relief to companies and small businesses, it's only fair that we tighten the law for those avoiding their fair share," said Senate Finance Committee Chairman Charles Grassley.
One of the biggest changes raises US$39 billion by blocking companies from generating immediate tax deductions by leasing and writing off the depreciated value of foreign and domestic public works, such as bridges, buses and trains.
The bill also would adjust tax rules for multinational corporations.
Senators voted 74-23 to keep those new tax rules, which Senate tax-writers said reduced double taxation of companies that operate in the US and abroad. Adjustments to international taxation proved a serious obstacle in the House.
The Senate bill overcame its last major hurdle Tuesday when lawmakers agreed to vote on an amendment extending federal unemployment insurance benefits.
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