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CNN Money: Democrats' tax bill targets outsourced jobs


September 27, 2010- Senate Democrats this week will push legislation they say will create jobs and discourage companies from shipping jobs overseas.

The bill, introduced last week by Sen. Dick Durbin of Illinois, would give companies a break on payroll taxes for new U.S. jobs that replace positions that had been based overseas. It would also rein in tax incentives for moving jobs outside the United States.

Durbin and other Democrats plan to bring the bill up for a vote Tuesday, but the legislation has already come under attack from Republicans and business groups. (A busy year-end tax agenda for Congress.)

The U.S. Chamber of Commerce called on lawmakers to oppose the bill, saying it would hurt the economy and lead to job cuts. Instead, the group urged lawmakers to extend all of the Bush tax cuts set to expire on Dec. 31 -- an issue Congress is unlikely to resolve until after congressional elections on Nov. 2.

The debate over outsourcing comes as Congress is under pressure to stimulate jobs, with the nation's unemployment rate holding near 10%.

But tax policy analysts say the bill is politically-motivated and doubt that it will have a meaningful impact on hiring. (Risk of double-dip recession: Unlikely but rising.)

"I don't think this package is going to be successful," said Anne Mathias, a tax analyst at Concept Capital's Washington Research Group. "Politically it makes sense, but economically I'm not sure it will work."

Tax holiday: The Creating American Jobs and Ending Offshoring Act would give U.S. employers a two-year break from payroll taxes on wages paid to new U.S. workers performing services in the United States, according to a summary of the legislation.

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