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Kerry's Stolen Tax Plan and AFL-CIO Hypocrisy
9/27/04 | Frumanchu

Posted on 09/27/2004 8:36:39 PM PDT by Frumanchu

Wanting of course to be well educated on the issues at stake in this election, I was reading through Kerry's tax reform plan on his campaign site and thought it sounded familiar. A little digging quickly showed why.

During a recent discussion with one of my co-workers over the reasons he was voting for Senator Kerry instead of President Bush, the issue of outsourcing came up. He said that he disagreed with the fact that Bush wanted to outsource all of our jobs and at my request forwarded me the source of information that led him to believe this. He sent me a link to a statement on the AFL-CIO website ( which criticized President Bush for promoting “tax breaks for U.S. firms’ offshore operations” which will “encourage companies to export more jobs.” This declaration was based upon the Bush Administration’s support of Senate Bill 1637 (the "Jumpstart Our Business Strength" or JOBS Act), which they claimed give tax incentives to companies to "ship jobs overseas.” ( I followed the links graciously provided by the AFL-CIO and began reading up on “S.1637”

The Congressional Legislation Summary ( reads as follows:

A bill to amend the Internal Revenue Code of 1986 to comply with the World Trade Organization rulings on the FSC/ETI benefit in a manner that preserves jobs and production activities in the United States, to reform and simplify the international taxation rules of the United States, and for other purposes.

So, the stated intent of this legislation is to reform the tax code to comply with the WTO rulings in such a way as to "preserve jobs and production activities in the United States."

The bill was introduced on 9/18/2003 by Republican Iowa Senator Charles Grassley and co-sponsored by 10 other Senators...including Senator John F. Kerry (D-MA) on 9/30/2003. At this point I was confused as to how the AFL-CIO, which is unabashedly pro-Kerry, could criticize President Bush for supporting a bill that their own candidate sponsored. Looking a little further into it I found that, according to the bill status on the Library of Congress website (, Senator Kerry subsequently withdrew his co-sponsorship of this bill just two weeks later (10/15/2003). The voting record ( shows that for every single vote brought for that bill and its related amendments, Senator Kerry did not register a vote...and was often the only Senator who did not vote (Vice Presidential Candidate John Edwards showed up for a handful of votes on the amendments, consistently voting Nay).

On March 4, 2004, one day after it was laid before the Senate, the Bush Administration issued a statement ( in support of the bill, saying that “The Administration looks forward to working with Congress on enacting legislation that removes the threat of escalating EU sanctions and encourages economic growth and job creation at home.” The Administration's statement of support matches the stated intent of the bill given above. The bill went on to pass the Senate on May 11, 2004 by a vote of 92-5 with John Kerry, John Edwards and John McCain absent.

So far we have a bill, co-sponsored by Kerry and endorsed by the Bush Administration, which was intended to eliminate tariffs in such a way as to promote domestic job growth. While Senator Kerry’s quick withdrawal of sponsorship in October of last year was curious, particularly since no changes or amendments had yet been proposed, his lack of attendance during the subsequent floor votes makes it difficult to determine what if any opposition he had to the proposals laid forth in the bill.

Let's look at what the Senate Bill is designed to do.

Senate Bill:

According to an AP article on the American International Automobile Dealers website (, the Senate bill would "repeal a $5 billion annual tax break for U.S. exporters that triggered punishing tariffs from Europe." The WTO ruled that the tax break amounted to an "illegal export subsidy" and the European Union implemented a tariff on American exports which started at 5% in March, 2004 and increases 1% each month up to 17% by next year.

To replace the $5 billion tax break, the bill creates "new tax cuts for American manufacturers tied to the extent that they make their products in the United States." The overall cost of the bill is $170 billion, with that cost being offset by closed tax shelters and loopholes and the repeal of the original $5 billion export subsidy.

Among the provisions to international tax rules was one which "temporarily cuts taxes on income held abroad when it is brought back to the United States." A portion of the money in the bill is allocated to revisions in the international tax rules to eliminate a double taxation of corporations (a move which opponents claim encourages overseas outsourcing despite the fact that the bill is "3-to-1 in favor of domestic issues").

According do the Democratic Policy Committee (, the temporary “tax holiday” is the most controversial portion of the proposal. For a period of one year the tax rate on profits from foreign investments which are returned to the US is dropped from it’s normal rate of 35% to a reduced rate of 5.25%. Proponents argue that it will “bring funds home to the U.S. that companies would otherwise leave abroad, money that could be used to invest in the domestic economy.” Those against it say it may give precedent and incentive for companies to invest more overseas in the hopes of deferring tax on their profits until possible later repatriation incentives. This is the main issue the AFL-CIO has with the bill, and the main reason it criticizes President Bush for supporting it, regardless of the other merits of the bill.

So, the question is, does Kerry support this bill, in part or in whole, or not?

Kerry Plan:

John Kerry's tax reform plan on his campaign site ( includes among other things:

- A "One-Year Tax Holiday" reducing taxes on profits to 10% to encourage American companies to repatriate their profits (S.1637 includes temporary reduction to 5% for repatriation)

- Reduction in the corporate tax rate from 35% to 33.25% (S.1637 reduces from 35% to 32%)

- "New Jobs Tax Credits" to offset added payroll tax costs for hiring new employees (S.1637 would "give manufacturers a 50% tax credit for the cost of adding jobs" - D.Feinstein, 5/12/04)

There are many other similarities as well.

So, while Senator Kerry did not feel the need to show up for a single vote related to the bill he originally co-sponsored for two weeks (consistently the only Senator absent), Democratic Presidential Candidate Kerry presents it as his bold new plan to reform America's tax system. The very proposals which the AFL-CIO blasted the Bush Administration for supported are an integral part of Kerry’s plan.

TOPICS: Business/Economy; Editorial; Government; News/Current Events; Politics/Elections
KEYWORDS: aflcio; kerry; kerryeconomics; outsourcing; senatebill1637; taxes; taxreform; taxreformplan; trade

1 posted on 09/27/2004 8:36:40 PM PDT by Frumanchu
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To: Frumanchu

Click for the entire CouNTeRPuNcH Collection

Political Parodies and more

2 posted on 09/27/2004 8:38:33 PM PDT by counterpunch (The CouNTeRPuNcH Collection -
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To: Frumanchu

Presidents crib ideas from here, there and everywhere. They typically are not orginal minds; we hire them to separate the wheat from the chaff. So the j'accuse of Kerry is not that he cribs, but what he cribs.

3 posted on 09/27/2004 8:39:03 PM PDT by Torie (TO)
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To: drstevej; OrthodoxPresbyterian; CCWoody; Wrigley; Gamecock; Jean Chauvin; jude24; Alex Murphy; ...

I wish I had the time to make a better presentation of this information, but I figured I'd get it out there.

4 posted on 09/27/2004 8:41:10 PM PDT by Frumanchu (I fear the sanctions of the Mediator far above the sanctions of the moderator...)
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To: counterpunch; Frumanchu
Oh, that's good. Counterpunch, indeed! That's very good.

Thanks for the ping, Fru.

5 posted on 09/27/2004 8:43:45 PM PDT by OrthodoxPresbyterian (We are Unworthy Servants; We have only done Our Duty)
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To: Frumanchu

Good work, Fru.

6 posted on 09/27/2004 8:45:41 PM PDT by savedbygrace
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To: Frumanchu

Good sleuthing and interesting. Let's see how the Bush team responds... Now, please translate the quote (?) from your home page.

7 posted on 09/27/2004 8:47:20 PM PDT by Libertina (10 Little Lying MSM Networks. CBS went down, and soon there'll be none!)
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To: Frumanchu

I hope these article will clear up some myths on outsourcing. It is a complete straw hat of an issue.|Articles,op|show,id|543|Articles,op|show,id|542

8 posted on 09/27/2004 8:50:40 PM PDT by mnehring (cBS- Fourth Column, Fifth Estate, Disinformers)
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To: Frumanchu

So, how does Kerry plan to create jobs? Raise taxes on employers.

Hey, John, just who do you think "the wealthiest 2%" are? Well, after you take away the Hollywood Halfwits, the prima donna sports stars, the wheelchair-chasing trial lawyers like John Edwards, and parasites like you and Ted Kennedy who married or inherited their money, what you have left are hard-working small business owners who employ millions of Americans and are responsible for most of the new jobs in this country. And you've promised to raise their taxes. Can somebody please explain to me how the hell THAT'S supposed to create jobs?

Oh, sure, you'll give them a tax break if they behave in a "socially responsible manner," i.e., according to the whims of all your little extremist constituency groups (and not in the best interests of themselves, their investors, their employees, or their customers).

Sorry, Johnny, no sale.

9 posted on 09/27/2004 8:59:34 PM PDT by Oliver_Clozoff (Respected in my own little corner of the world.)
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To: Frumanchu

Fru - With your research have you been able to convince your friend that Bush isn't trying to outsource his job? If you get a chance let us know if your able to convert him from the 'Dark Side'.

10 posted on 09/27/2004 9:10:42 PM PDT by reed13k
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To: Frumanchu; xzins

Excellent work, Fru.

11 posted on 09/27/2004 10:24:23 PM PDT by Dr. Eckleburg (John Kerry is a GirlyManchurian Candidate.)
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To: Frumanchu; Howlin; MeekOneGOP

This is really a great comparison and explanation, Fru.

Thanks for your digging and hard work.

12 posted on 09/28/2004 3:30:33 AM PDT by xzins (Retired Army and Proudly Supporting BUSH/CHENEY 2004!)
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To: Frumanchu

BUMP for later reading!

13 posted on 09/28/2004 3:33:46 AM PDT by ThomasMore (Pax et bonum!)
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To: reed13k

Unfortunately, no. It doesn't matter how many facts you present a person. If he doesn't want to believe it, he ain't gonna believe it.

14 posted on 09/28/2004 3:34:39 AM PDT by Frumanchu (I fear the sanctions of the Mediator far above the sanctions of the moderator...)
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To: Frumanchu

I may be the last person on God's Green Earth who still says it 'The AF of L-CIO.'

15 posted on 09/28/2004 3:37:45 AM PDT by HitmanLV (I will not be pushed, filed, stamped, indexed, briefed, debriefed or numbered. My life is my own.)
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To: xzins; Frumanchu; Happy2BMe

16 posted on 09/28/2004 5:51:36 AM PDT by MeekOneGOP (There is only one GOOD 'RAT: one that has been voted OUT of POWER !! Straight ticket GOP!)
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To: Libertina
Now, please translate the quote (?) from your home page.

What quote would that be?

17 posted on 09/28/2004 5:41:05 PM PDT by Frumanchu (I fear the sanctions of the Mediator far above the sanctions of the moderator...)
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To: Frumanchu

Solid piece of work, Fru. Thanks!

18 posted on 09/28/2004 8:11:35 PM PDT by RochesterFan
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