DeLauro Says GOP Tax Cuts Imperil Jobs
CT News Junkie
WASHINGTON, DC — Congresswoman Rosa DeLauro released a report this week claiming Connecticut is at risk of losing as many as 199,200 jobs due to tax changes signed into law by President Donald Trump at the end of 2017.
The report, which relies on statistical analysis, says manufacturing faces the greatest threat, accounting for as many as 75,200 jobs. The report, however, fails to take into account announced long-term pledges from the state’s largest defense manufacturers that they intend to hire more employees for themselves as well as spend more on subcontractors in Connecticut.
The $1.5 billion tax cut bill was supported by Republicans in Congress, who claimed it would help stimulate the economy. Democrats opposed it saying most of the benefits would go to wealthy individuals and corporations.
DeLauro requested a report on the effects of the Republican Tax Plan from the Democratic staff of the Joint Economic Committee in Congress. The six-page report focuses on changes made in tax policy that the Democrats claim would encourage companies to move factories and jobs overseas, where corporate profits are taxed at lower rates.
The report claims about 199,200 Connecticut residents — including 75,200 in manufacturing jobs — are at risk of seeing their jobs moved overseas due to the tax changes, based on Department of Labor data on industries that have a track record of moving production to foreign countries. Another 22,700 jobs at risk are in the insurance industry, which has moved operations overseas 66 times in the last five years.
However, United Technologies, Sikorsky and Electric Boat have each made long-term commitments to the state in recent years. Electric Boat is expected to expand its workforce and invest more than $800 million in Connecticut over the next 17 years. Lockheed Martin moved production of nearly 200 CH-53K King Stallion “heavy lift” helicopters to Sikorsky in exchange for $220 million in state grants and tax offsets.
And in 2014 United Technologies was given permission to use $400 million in unused tax credits as long as it committed to keep Pratt & Whitney in Connecticut for at least 15 years and Sikorsky in Stratford for at least five.
Two tax changes are particularly concerning, according to the report from the Democrats — “Global Intangible Low-Taxed Income” and “Foreign Derived Intangible Income.”
The first change creates a new minimum tax on global intangible income. It is designed to discourage companies from moving “intangible assets” such as patents and copyrights overseas but perversely could encourage companies to offshore tangible assets — factories and jobs — to reduce the amount of foreign income subject to the GILTI tax.
The second tax change creates a deduction for a new category of income, Foreign Derived Intangible Income tied to exports. Under this change, having more tangible assets in the U.S. reduces the amount of income that qualifies for the deduction, which could also encourage companies to move factories and jobs overseas, according to the Democrats.