Oct. 12, 2004--Congress voted Monday to approve an inclusive $140 billion corporate tax-cut bill in the hopes of defusing ongoing European Union tariffs aimed at U.S. exporters.
The U.S. Senate voted by a 69-17 margin to approve the American Jobs Creation Act of 2004. The House of Representatives last week approved the bill by a vote of 280-141. The bill will now move on to the White House, where President Bush is expected to sign it into law.
The sweeping legislation ended a standoff between the two houses of Congress that had been squeezing exporters since March, when the World Trade Organization ruled that a U.S. tax provision constituted an illegal export subsidy for American businesses, triggering retaliatory EU import duties. The tariffs started at 5% and have been increasing at a rate of one percentage point each month, reaching 12% in October.
To counterbalance the elimination of the export tax break and other loopholes, the bill introduced an array of new tax breaks, including a reduction in the tax rate for domestic manufacturers from 35 to 32%. Among the bill's numerous other provisions are a $10 billion buyout of tobacco farm subsidies and a multibillion-dollar tax cut for American companies that operate internationally.