Schakowsky Introduces Legislation to Reward Patriotic Corporations

Washington, D.C.– Rep. Jan Schakowsky introduced H.R. 5372, the Patriot Employer Tax Credit Act on Thursday. The legislation provides tax credits to companies that invest in American workers instead of rewarding companies that ship jobs overseas. Reps. Raul Grijalva, Robin Kelly, and Barbara Lee joined as cosponsors of the bill. Senator Dick Durbin introduced the bill in the Senate.

“More and more often, American companies are manipulating the tax code to hide profits or move jobs overseas,” Schakowsky said. “The Patriot Employer Tax Credit Act makes sure that tax credits go to companies that build and strengthen this country – hiring American workers, paying their employees a living wage, providing health coverage, and enabling their workers to save for retirement. We should reward patriot employers instead of giving American taxpayer funded breaks to companies that are trying to avoid paying their fair share. I thank Senator Durbin for his leadership on this bill, and I look forward to working with him to see it enacted.”

“We should be rewarding American businesses that exemplify American values and support good-paying American jobs,” Durbin said. “We should be rewarding companies that invest in their workers by providing fair wages, health insurance and retirement benefits, not corporations that ship jobs overseas. I would like to thank my colleague in the Illinois Congressional Delegation, Representative Schakowsky, for her support on this important measure.”

Under the legislation, companies would receive a tax credit equal to 10% of the first $15,000 in qualified wages for U.S. workers, if they meet certain criteria:

• Invest in American Jobs: Companies cannot move headquarters overseas or reduce the number or percentage of U.S.-based workers in comparison to workers overseas.

• Pay Fair Wages: Companies must pay at least 90% of U.S. workers an hourly wage equal to 150% of poverty for a family of three (about $14/hour or $30,000/year).

• Provide Quality Health Insurance: Companies must offer Affordable Care Act compliant healthcare to employees.

• Prepare Workers for Retirement: Companies must provide 90% of non-highly compensated U.S. employees a defined benefit plan OR a defined contribution plan and contribute at least 5% of worker compensation.

• Support Our Troops and Veterans: Companies must pay the difference between regular salary and military compensation for all National Guard and Reserve employees called for active duty and have a plan in place to recruit veterans.

• Create a Diverse Workforce: Companies must have a plan in place to recruit employees with disabilities.

The bill allows slightly amended benchmarks for small businesses to ensure that they can access the credit. To offset the cost of the Patriot Employer Tax Credit, the legislation would close a loophole that allows corporations to deduct interest expenses used to invest overseas – such as the interest costs of building a manufacturing plant overseas or shipping materials abroad – while allowing the company to defer paying taxes on income derived from those investments until it is repatriated. That loophole costs the economy about $50 billion each year.