Both the House and the Senate have passed the American Job Creation Act of 2004 by wide margins, putting it on the path to the desk of President Bush, who, despite expressing some misgivings over the bill's voluminous special interest provisions, has indicated that he will sign it.
Following its passage last week by the House, the Senate passed the $137 billion corporate tax bill on Monday in a 69-17 vote. The legislation is intended to eliminate the cause of tariffs that European Union members have imposed on U.S. products since March 1, 2004. The tariffs, which began at 5 percent, have escalated 1 percent a month and are now at 12 percent.
While the original intent of the bill was simply to repeal the Foreign Sales Corporation/Extra Territorial Income provisions that the World Trade Organization ruled illegal, the end result is "something for everyone," according to Martin B. Tittle, an Ann Arbor, Mich.-based international tax attorney.
"It's over 600 pages long, and in order to get it passed everyone wanted a piece of the pie," he said.
"Just about any special interest that didn't get something into the bill should fire their lobbyist," he said. "My personal favorite is the suspension of the 4.7 percent duty on imported ceiling fans."
Because the benefits are aimed at manufacturers, he noted, "It will encourage every business to shoehorn itself into the definition of a manufacturer."
